Taxes

[Unregistered]

Client is a minister. I saw his w-2. Only box one is populated. Otherwise it is blank. This wage amount does not include "Housing allowances"

I should report box 1 as wages on Sch "C'" as it is subjct to SE tax and fed tax

Housing allowance is subject to SE tax only. Report on SCH "C" but it would also caculate fed tax? Or should I just do "SE" form?

Please help.

[Bucky]

You show the w-2 as income like you would any other w-2. This amount is also subject to se tax. the housing allowance is only subject to se tax. Most software let you make adjustments to se tax form. He can reduce se tax by any unreimbursed 2106 expenses he paid out of pocket even if he doesn't itemize. Ministers are a different breed. See if your software has a clergy worksheet. I know Drake does and it works wonders.

Bucky

[Chief]

Minister's Income

There is an IRS publication for ministers. Don't assume the housing allowance is totally spent on housing. What isn't needs to be reported as regular income. The amount that is spent on housing is reported on Sch SE for SE employment tax. Now other income reported as income related to the church is reported on Sch C like funerals, marriages, revivals, etc and also supplies related to performing these functions. You may wish to report supplies and expenses related to pastoring the church could be reported on Form 2106. The previous post is correct in that W2 is reported the same as any W2. Good luck.

[Unregistered]

You show the w-2 as income like you would any other w-2. This amount is also subject to se tax. the housing allowance is only subject to se tax. Most software let you make adjustments to se tax form. He can reduce se tax by any unreimbursed 2106 expenses he paid out of pocket even if he doesn't itemize. Ministers are a different breed. See if your software has a clergy worksheet. I know Drake does and it works wonders.

Bucky

Thanks

Do I need to get expense detail, total it & compare to allowance?
Also, if it is under (less spent) then report on line 21 as other income or Sch "C"?
Since this minister owns home, fair rental value play any role?
Also there is a difference beween box 1 of W-2 and 16 (State wages) of $7,000. What does it mean? State is Illinois

[Black Bart]

My son: The tithe is the

Client is a minister. I saw his w-2. Only box one is populated. Otherwise it is blank. This wage amount does not include "Housing allowances."
I should report box 1 as wages on Sch "C'" as it is subjct to SE tax and fed tax.
Housing allowance is subject to SE tax only. Report on SCH "C" but it would also caculate fed tax? Or should I just do "SE" form? Please help.

Lord's and the subscription is The Tax Book's. Please sign-in, sign-up, and subscribe. Your $140 (less without "all-states") will be tax-deductible and your "donation" will be attributed to "a happy parishioner/petitioner who passed this way."

Now--like this:

$30,000 - Wages from Form W-2
+ 5,000 - Housing allowance
- 2,000 - 2106 Expenses (car operation, etc.--usually standard mileage allowance)

$33,000 - Sub-total

+ 3,000 - Net earnings from "C" (wedding, funerals, etc. less related expenses)

$36,000 - Net self-employment earnings (for Schedule SE)

You're right about the "not-spent" money. If actual housing expenses are, say, $4,800, then put the $200 difference on line 21 of 1040 as "Unused Housing Allowance." About the "fair rental" question, I'm thinkin' it's nothin' to you because IRS tried to tax it a few years back, but it seems like the preachers' lobby raised some much "Cain" about it, that IRS backed off and said "forget it." As to the IL $7K, I don't have a clue. The "Chief" might know. He's the resident board expert on all things ministerial (does/did some pastoring).

Peace be with you.

[Unregistered]

$7,000 diff

There is an IRS publication for ministers. Don't assume the housing allowance is totally spent on housing. What isn't needs to be reported as regular income. The amount that is spent on housing is reported on Sch SE for SE employment tax. Now other income reported as income related to the church is reported on Sch C like funerals, marriages, revivals, etc and also supplies related to performing these functions. You may wish to report supplies and expenses related to pastoring the church could be reported on Form 2106. The previous post is correct in that W2 is reported the same as any W2. Good luck.

Chief: Do you know why there would be a difference between box 1 of W-2 and box 16 (State wages) of W-2. Diff. is $7,000. State is Illinois. Box 16 is less by $7,000.

Thanks

[Black Bart]

Yo, Chief,

Any clues?

[Chief]

State Information

I looked in the All States book and could find nothing about clergy income. I dont know about Illinois. I would call 1-800-732-8866 or 1-217-782-3336 the state information numbers for Illinois tax assistance.

[Unregistered]

Found the answer!

I looked in the All States book and could find nothing about clergy income. I dont know about Illinois. I would call 1-800-732-8866 or 1-217-782-3336 the state information numbers for Illinois tax assistance.

Finally, I found why there was a difference of $7,000 between box 1 and box 16 (state wages) of W-2! The treasurer at the church said it was CAR ALLOWANCE!!

Car allownace is taxable in state of Illinois and at federal level! I think W-2 is wrong!

[Black Bart]

Well, good! Fire the treasurer (unless it's you).

Now; what about that subscription?

[Unregistered]

Now; what about that subscription?

Treasurer: It is not me.

About the subscription: I have Taxbook and I looked into it. I also looked into IRS PUB. This board and another one helped me a lot.

Thank you every one. God bless you all!

Now PEACE will be with me! (I hope)