Minister Income

[Bonnie]

For a minister who receives a W-2 and pays his own self-employment tax, can someone tell me what the correct amount to carry to the 8812? Is it AGI? Or AGI minus expenses on 2106 which are deducted to figure SE. Or is it AGI plus housing? Or AGI plus housing minus expenses on 2106? I have seen different programs do different things with this and it is such a unique situation that I am wondering what is correct?

Thanks
Bonnie

[veritas]

Hi Bonnie

Look at page 14-6 of the TaxBook for a pretty good explanation.

[Bonnie]

Minister

Look at page 14-6 of the TaxBook for a pretty good explanation.

I read the Tax Book and it does not make any reference to the 8812 and what to use on that form. I do see that it says to use the housing allowance to figure EIC so I guess I could assume it would be the same for the ACTC but I also learned a long time ago not to assume. That still leaves me hanging about what to do with the half of SE and his expenses on 2106 when figuring for 8812. I have used different programs over the years and they all do different things so just wanted to know what is really correct. I've been on the phone with the IRS this morning and no one could answer my question so after talking with 3 different people and not wanting to be transfered again, I just gave up. Thanks for any help anyone can give me.
Bonnie

[Bucky]

Try Pub 972. i think they have a worksheet that deals with this.

[RLymanC]

Form 8812

Calculate "Earned Income" and use that amount on form 8812. The 1/2 SE deduction does not come into play. "Earned Income" is usally the amount on Line 22 of Form 1040.

If there is any interest income, Div. income, alimony income etc., it would not be concidered earned income. All the 2106 expenses do not subtract from earned income.

[Bonnie]

earned income

In this case, the amount on line 22 does not include the housing allowance which is non taxable but still subject to SE and it is earned income so that is my dilema. I'm not sure if I should add on the housing allowance.

[Bonnie]

Pub 972

I have been through the worksheet in Pub 972. Went through it this morning with a woman on the phone from the IRS. She was no help at all. The form has a place to add back in the non taxable combat pay, but makes no mention of non taxable housing allowance for ministers. Seems very similiar but I can find know one who knows for sure if I am to add it back??

[veritas]

Its interesting

the instructions say to subtract amounts given non-taxable housing allowance on the form 8812 instructions line 4a.

Is that what you are asking?

[WhiteOleander]

Read the instructions for the form. It has a chart "EARNED INCOME CHART-LINE 4A". It addresses the housing allowance in the part about completeing worksheet B page 51 It is discussing what to do if you are taking EIC. Follow the chart through.
HTH