Clergy, minister, or missionary wages reported on Form W-2 are subject to self-employment taxes, but no Social Security and Medicare taxes are withheld. While entering your Form W-2, you will see a screen that says W2: Tell us if any of these situations apply. Here you can select Income earned as a minister or clergy member.
In desktop navigation, the question Was [NAME] a minister or member of the clergy in 2024? is displayed at the end of the W-2 interview when boxes 4 and 6 are blank.
Generally, the housing allowance is reported in Box 14 of the W-2 and is not included in Boxes 1, 3, or 5. The fair rental value of a parsonage or the housing allowance can be excluded from income only for income tax purposes. No exclusion applies for self-employment tax purposes. Therefore, the TaxAct program requires that the housing allowance be entered on the Self-Employment Tax Adjustment Worksheet for calculation of the SE tax. The allowance is then transferred to Schedule SE, Self-Employment Tax, Section B, Part I, Line 2 for calculation of the SE tax, but will not be added to the income on Form 1040, U.S. Individual Income Tax Return.
Excess housing allowance is generated when the housing allowance the clergy member received from the church or organization is more than the amount actually used to provide a home. The excess housing allowance will be transferred to Form 1040, Line 8.
To report a housing allowance in the TaxAct program, follow the steps below.
Online
Dashboard
From within your TaxAct return, click Taxes & Miscellaneous.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Additional Tax Payments drop-down.
Click Add beside Self-Employed Tax.
Click Yes, and continue with the interview process, making applicable entries, until you reach the screen titled Self-Employment Tax - Housing Allowance.
Click Yes, then complete the rest of the interview process.
Classic
From within your TaxAct return, click Federal.
On smaller devices, click the menu at the top left corner of your screen, then make your selection.
Click the Taxes drop-down, then click Self-employment tax adjustments.
Click Yes, and continue with the interview process, making applicable entries, until you reach the screen titled Self-Employment Tax - Housing Allowance.
Click Yes, then complete the rest of the interview process.
Desktop
From within your TaxAct return, click Federal.
Click the Taxes drop-down, then click Self-employment tax adjustments.
Click Yes, and continue with the interview process, making applicable entries, until you reach the screen titled Self-Employment Tax - Housing Allowance.
Click Yes, then complete the rest of the interview process.
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