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New Member
posted Jun 1, 2019 2:15:36 AM

I work for a church but was only considered self-employed for half the year. How do I pay my self-employment tax for only that portion of my income on TurboTax?

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6 Replies
Level 15
Jun 1, 2019 2:15:36 AM

You were classified as a regular employee for part of the year and clergy for part of the year?

Clergy are only considered self-employed for limited tax purposes. Most of the time they are common law employees and should receive a W-2.  Box 1 should show your total taxable wages, and boxes 3 and 5 should show your wages that were applicable to your regular employee wages only (subject to FICA and Medicare tax).

Does this sound right?  Do you also have a housing allowance?

There are two methods to enter your income.  Both require you to take responsibility for your numbers and won't be covered by the accuracy guarantee.  If this bothers you, see a professional this year.  Otherwise, I can explain your options.

New Member
Jun 1, 2019 2:15:38 AM

The numbers are clear in my W-2 for the year's total. It shows the amount that was designated as a housing allowance, but once I became considered clergy, the church stopped withholding taxes for income, Social Security, and Medicare. Does Turbo Tax automatically calculate if those numbers are not enough and deducts them from my return as a result?

Level 15
Jun 1, 2019 2:15:40 AM

No, Turbotax will get confused and not handle it correctly.  You have to make manual adjustments by one of two methods.

New Member
Jun 1, 2019 2:15:42 AM

How can I do this?

Level 15
Jun 1, 2019 2:15:43 AM

There are two ways to handle this.

1. Separate your W-2 into 2 imaginary W-2s, one for your employee work (with wages in box 1, 2, and 5 and taxes in boxes 2, 4 and 6) and the other for your clergy work (with box 1 wages, and boxes 3-6 blank.  You might or might not have withholding in box 2.)  Enter the employee W-2 first, then go back, click "I have another W-2" and enter the clergy W-2.  After entering the clergy W-2, be sure to check the box on the page of special circumstances for "religious wages" and enter your housing allowance and housing expenses.  (Even though your housing allowance may be in box 14, turbotax won't automatically pick it up and you need to enter it specifically.)

If you make a mistake in splitting your W-2, that is on you and won't be covered by the accuracy guarantee, but you can e-file.  Save proof of your adjustments (why you made them and how you calculated them) for at least 3 years.


2. This method can only be done using Turbotax desktop version installed on your own computer.  Enter your one W-2 as-is.  Check the box for religious wages and enter your housing allowance and answer the questions.  Then, switch to Forms mode and locate the Schedule SE Adjustment Worksheet.  Line 5a is clergy wages, it will be the amount of your W-2 box 1, which is too high, since it includes non-religious wages that were already taxed.  The program is currently taxing your non-clergy wages twice.  Highlight line 5a and select "Override" from the Forms menu, and replace the figure with the dollar amount of your clergy wages only (the amount that was not taxed for FICA and needs to be taxed for Self-employment.)

Overrides void the accuracy guarantee and will prevent you from e-filing so print and file by mail.

New Member
Jun 1, 2019 2:15:45 AM

Thanks! Very Helpful!