1040-US: Entering minister wages and housing allowance information subject to self-employment tax

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Question

How do I enter minister wages and housing allowances subject to self-employment tax?

Answer

Enter minister wages subject to self-employment tax in Screen W2, located in the Income folder. Enter 1 in the Wage code field to indicate Minister; the amount of federal wages automatically transfers to Clergy Worksheet 1, line 1. Enter 2 in the Code field in the Box 14 statement to indicate housing allowance, and enter the amount you want transferred to Clergy Worksheet 1, line 4a.

You must enter data in Screen Clergy, located in the Taxes folder. If a parsonage is provided, complete the Parsonage provided by church subsection. If an allowance is provided, complete the Parsonage or rental allowance provided by church subsection. Clergy Worksheet 1 will calculate if there is any excess allowance to report on Form 1040 line 7, and the allowed housing allowance will be included on Schedule SE.

If the information is not reported on Form W-2, enter the amount of the housing allowance subject to self-employment tax in the Parsonage or Allowance Housing Information section in Screen Clergy. Amounts entered in the Fair rental value of parsonage provided by church field transfer to Clergy Worksheet 1, line 3a. Amounts entered in the Parsonage allowance (Force) field transfer to Clergy Worksheet 1, line 4a. The amounts transfer to the applicable line of the SE Earnings Worksheet.

Related topic: Minister wages and church employee income FAQs (1040)

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