My W2 contains amount labelled "parsonage" in box 14. How do I enter this amount on my Schedule SE?

[hamich1]

I already checked the box in the section labelled "Job" that I want to pay SE tax on my housing allowance, and I would think that Trubotax would automatically prompt me to enter this in the section labelled "Self-employment income and expenses", but that section does even have a category that fits the description for clergy housing allowance!

[ShirlynW]

To enter your "Parsonage allowance," here are the steps:

1. Open TurboTax
2. Federal > Wages & Income > Job (W-2) > Edit/Add.
3. Delete the W-2 on the screen, "Your W-2 info so far."
4. Add a new W-2.
5. Enter the W-2 > Continue until you see the screen below. Select "Religious employment."

        6.  Continue > Select the correct option > Continue.

         7.  On the screen below enter the parsonage or housing allowance. Continue.

    8.  On the screen below select how the taxes should be calculated.

[hamich1]

Thank you.  That's what I did: I clicked the box for "clergy", entered the amounts, and then clicked "Pay self-employment tax on my housing allowance", but my housing allowance still did not show up on my Schedule SE!  What am I missing?

[PattiF]

Here are some additional steps from a TurboTax Help article:

When you see the Your W-2 info so far screen, select Edit to view your W-2 information. If the Box 1 amount hasn't been adjusted for your housing allowance, enter a Line 21 adjustment to income. Here's how:

1. Search for other reportable income and select the Jump to link in the search results
2. Answer No to Did you receive any other wages? and select Continue
3. Scroll to the bottom of the Miscellaneous Income screen and choose Start next to Other reportable income
4. Answer Yes, and on the Other Taxable Income screen, type Clergy Housing Allowance in the description and enter it as a negative number (precede it with a minus sign, for example -10,000)

@hamich1 

[hamich1]

Thank you -- that's very helpful.  But my housing allowance is still not showing up on my Schedule SE, nor is there any prompt in the Self Employment Income section as to where to enter it.  Do I need to enter it manually?

[hamich1]

And if I do need to enter it manually, where do I do that?

[DianeW777]

This is a common scenario within the clergy or pastor occupation. A W-2 with zero wages cannot be e-filed which is causing the issue. By entering $1 in the wage box for both federal and state you may be able to pass the e-file check. When tested TurboTax moves forward with the tax return.  Once you do that you can follow the instructions in the link below.  See the images provided.

• How do I enter parsonage or housing allowance reported on my W-2?
  • Be sure to select 'Pay self-employment tax on my wages and housing allowance'
  • Complete your tax return.

[hamich1]

Sorry, I should have been clearer: my housing allowance is only a portion of my regular salary, and is reported on the W-2 in box 14.  I didn't have a problem entering it there, but I didn't know how to enter it so that it shows up on my Schedule SE.
What I've done now is followed the instructions for "How do I enter a parsonage or housing allowance if I got a 1099-NEC?"  I created a new line of work in the self-employment section, called it "clergy", and entered my housing allowance there.  I haven't checked my Schedule SE yet to see if it appears there, but as the "amount of federal tax due" jumped when I entered this information, I assume that it worked.

the rest of my salary

[DianeW777]

If you enter it in your W-2, then it will populate appropriately in the self employment tax as long as you answer the questions indicated.  If you enter it as a 1099-NEC, it may show up as taxable income for personal income tax when it should only be taxed for self employment tax.  Follow the instructions provided to have it populate as it should.  TurboTax will take it to the SE without adding it to your income.

@hamich1 

[hamich1]

OK, thank you.  I deleted the clergy line (and my tax bill returned to what it was before).  I followed the instructions for entering it on my W-2, so I hope you're right that the system calculated my SE tax correctly.

[hamich1]

Yes, it worked!  I see it now on my Schedule SE.  Thank you so much for all your help!