Housing Allowance Goof

[buzzardbreath]

Church paid Minister $70,000 in 2012, $60,000 in W-2 wages plus $10,000 housing allowance. Fine.

In 2013, the Church changes accountants. New W-2 reads $70,000 with no mention of a housing
allowance. Effective January 1, 2014, Minister resigns and begins work at another church.

I intend to treat $60,000 as salary and $10,000 as housing allowance, and I believe most of you
believe this to be proper.

However, what will happen when the IRS processes the W-2? Will there be an ugly letter, or CP2000
generated?? If so, how can this be avoided upon filing the return?

[Black Bart]

Church paid Minister $70,000 in 2012, $60,000 in W-2 wages plus $10,000 housing allowance. Fine.

In 2013, the Church changes accountants. New W-2 reads $70,000 with no mention of a housing
allowance. Effective January 1, 2014, Minister resigns and begins work at another church.

I intend to treat $60,000 as salary and $10,000 as housing allowance, and I believe most of you
believe this to be proper.

However, what will happen when the IRS processes the W-2? Will there be an ugly letter, or CP2000
generated?? If so, how can this be avoided upon filing the return?

Bummer. Things (and bookkeepers) change; usually for the worse. I agree with you on the 60/10 split, but can't see how it's going to fly in the long run (would expect no letter now, but a CP around late summer of '15). As you know, the W-2 has to read $60K when you start filling out the clergy worksheet adding back the $10K H.A. (less expenses) to get taxable SE, otherwise you'll be doubling up.

Any chance of getting a corrected W2? Maybe tell the new person he/she made a mistake, show last year's W-2 and (assuming there is one) H.A. statement . If dealing with a part-time clerk, you could offer to make the W2-C yourself. If an accountant, they may balk and say an H.A. should have been drawn up 1-1-13 or (more likely) that it's (pick one) correct as is/too much trouble/don't need your advice. I'm not optimistic and don't know any other way around it.

Maybe other poster suggestions?

[Burke]

I think you covered it all.

[MAMalody]

Church paid Minister $70,000 in 2012, $60,000 in W-2 wages plus $10,000 housing allowance. Fine.

In 2013, the Church changes accountants. New W-2 reads $70,000 with no mention of a housing
allowance. Effective January 1, 2014, Minister resigns and begins work at another church.

I intend to treat $60,000 as salary and $10,000 as housing allowance, and I believe most of you
believe this to be proper.

However, what will happen when the IRS processes the W-2? Will there be an ugly letter, or CP2000
generated?? If so, how can this be avoided upon filing the return?

Whoa! You do not mention that a housing allowance was approved for 2013. Was it? If it was not designated prior to the issuance of any funds he did not have a housing allowance. I may have missed a prior posting indicating this, however, I don't know that.

Now, there is no requirment to list a housing allowance on a W-2. It may be listed in box 12 as a courtesy, but it is not required.

If he truly had a housing allowance I would recommend trying to get a corrected W-2. Failing that, report the W-2 properly and fully and any designated and used housing allowance could be deducted on line 21 of Form 1040. In this way no, CP2000.

[Super Mom]

Whoa! You do not mention that a housing allowance was approved for 2013. Was it? If it was not designated prior to the issuance of any funds he did not have a housing allowance. I may have missed a prior posting indicating this, however, I don't know that.

Now, there is no requirment to list a housing allowance on a W-2. It may be listed in box 12 as a courtesy, but it is not required.

If he truly had a housing allowance I would recommend trying to get a corrected W-2. Failing that, report the W-2 properly and fully and any designated and used housing allowance could be deducted on line 21 of Form 1040. In this way no, CP2000.

My thoughts exactly, if no housing allowance was passed for 2013, there is not one.