software clitch

[culbrethcw]

Form Sch SE is not picking up the W-2 wages and reporting it.  I can enter an override, but appears i will not be able to file electronically.  Do i need to report his error to the IRS

[rjs]

Are you a church employee? W-2 wages are only entered on Schedule SE line 5a for church employees (as defined in the IRS Instructions for Schedule SE). If you are a church employee, after you entered your W-2 did you check the "Religious employment" box on the screen that asks about uncommon situations, and answer the follow-up questions?

[culbrethcw]

Thanks for that is NOT the issue.  I have to enter an override in that slot.  I don't recall having to do that in previous years. 

[SusanY1]

Can you tell us a bit more about why you need to pay SE tax on a W-2?  We have different steps for clergy, statutory employees, and foreign government and international organization members who are subject to this tax.  

[culbrethcw]

Yes, because ministers are classified as Self-employed for FICA purposes but employees for income tax purposes.  It is against IRS guidelines to withhold FICA tax on a minister who is working in a religious organization.  Two years i did not have to override the entry because Turbotax picked it up.  However this year was not the case. 

[DianeW777]

In TurboTax Desktop, after testing a scenario with a W-2 for a minister and entering the housing allowance when asked, the correct social security tax was calculated for both the housing and the wages. The steps taken are as follows:

1. Enter W-2 with no federal, social security or medicare tax. Wages in box 1 ($5,000 in my example) and housing in box 14, selecting the Category of Other (not classified).
2. Continue to the screen 'Let's check for uncommon situations', selected Religious employment > Continue > Select 'Clergy' on 'Let's dig into your religious employment.
3. Continue to enter Housing allowance and Qualifying expenses ($10,000 each in my example) > Continue
4. Select 'Pay self employment tax on my wages and housing allowance' > Continue
5. Complete the rest of your income, credits and deductions
6. Switch to Forms to view your Sch SE (T/S depending on who is the minister) to review your self employment tax.
7. See images below.

@culbrethcw