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Level 3
June 13, 2024
Question

Clergy W2 Clarification Housing Allowance SE Tax

  • June 13, 2024
  • 2 replies
  • 10 views

I previously asked a question about this and received an answer clarifying my understanding of the housing allowance.  The software was not calculating SE Tax.  I have called Proseries support but nothing they provided helped.  I clicked thru the options and it appears option 3 pay self employment on W2 income and housing allowance.  The options apply if no FICA was withheld. Problem is FICA was held so I do not know how to handle this.  Any recommendations on how to handle this?  If I ignore the housing the client gets a 9533 refund.  If I select option 3 he owes 2322.  He already paid 5921. How do I handle this?

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2 replies

Taxprohere
Level 7
June 14, 2024

If you're seeing that FICA was withheld, I would be confident the 'self-employment' aka FICA was paid through employer contribution as well as the withholding.  Do the amounts for SS/Med you see withheld match 7.65% of the wages AND housing allowance (which should not be in box 1).

I have one clergy client who arranged this with his church, so I suppose if the employer is willing....

And in this case, no need to make adjustments on the S/E worksheet. 

qbteachmt
Level 15
June 14, 2024

This is the Third Topic you have running for the very same issue. Now it makes it harder for the peer user volunteers to see what else has already been covered. Also, you didn't follow up here, to note what you tried or if you even did what was recommended:

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/clergy-housing-allowance/00/299515

You can add to a running topic to keep a discussion going and all in one place.

In general, the W2 may not be wrong. It is not unusual for clergy to be treated as Employee (with W2 earnings and FICA) and then the amounts they get from weddings and other officiant fees are self-employed Sched C income. Additionally, it matters if the clergy has opted out of FICA by filing that declaration.

Housing allowance is the third piece of info to address. Housing allowance, housing provided, housing costs, etc, are part of this discussion.

Perhaps you should find a local mentor. Once you better understand which piece of info goes which direction on the tax filing and gets treated how, it helps when you then are trying to use specific software to make that happen.

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