Catholic Priest

[TAXMAN]

A little help from the clergy guys please. Catholic priest got a w-2 with wages in box 1 and fit in box 2 and nothing else on w-2.In making inquiry church gives him salary and covers everything else. In looking at financial paper of church it only list salary for priest. Church owns house. How do I figure what goes on SE form. Priest has not signed a exempt certificate. Any help appreciated. :scratch_head:

[kcjenkins]

Enter the W-2, go to the top of that form, right above box 1, and click to get the dropdown menu, and select Clergy there. It will then generate a W-2 with nothing in box 3 or 5.

Then add the clergy worksheet, and it will add the SE form automatically, and feed to it from that worksheet.

[Gail in Virginia]

But you will have to determine the fair rental value of the church provided housing somehow. For that to be excluded from his income I think the church has to actually state an amount as housing allowance. This is then added to his income for SE tax. Surely the priest knows how much his housing allowance is, or can find out from someone at the church.

[Terry O]

It is my understanding that in some dioceses, the housing is NOT included in the W-2, hence the very low income.

[Gail in Virginia]

If the diocese treats it as housing allowance it does not need to be included in the w-2 income, but that does not exempt it from SE tax as I understand clergy taxes. But there are some people on this board with more experience in that than I have, so hopefully one of them will also respond.

[Margaret CPA in OH]

Gail is correct, according to Church and Clergy Tax Guide. In fact, I don't believe the housing allowance is ever included in the W-2 wages, rather is an item in Box 14 although not always listed.

[kcjenkins]

The housing allowance impact is one of the reasons for the Clergy Worksheets, folks. If it is used, the correct amount will flow to the SE automatically. When the house is provided, you input the FMV of the house and you also input what he actually spends on things like utilities, upkeep, lawn care, repairs, furnishings, etc. The worksheet computes the taxable amount very nicely if you use that.

[MAMalody]

Wow! Look at all the good answers above. I wish that when I started doing clergy returns that you folks had been there to help me out...would have been a lot easier and a lot less stuff to unlearn, if you know what I mean. The only additional comment I might make about clergy in general, not this instant case, is that the housing allowance is not required to be listed on the W-2 at all. It is always good to ask any clergy or religious worker if they have a housing allowance. I came across six or eight every year that don't think to mention it in their tax organzier and it is not on their W-2. As a point of interest about 1/2 the returns I do, the housing amount is not on the W-2.