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Entering minister income expense and housing allowance (parsonage) in Lacerte

SOLVEDby IntuitLacerte Tax230Updated September 21, 2021

This article will assist you with entering minister income, expenses, and housing allowances in the Individual module of Lacerte.

Follow these steps to enter minister wages:

  1. Go to Screen 10, Wages, Salaries Tips.
  2. Enter information from the W-2, including all income and applicable withholding.
  3. Scroll down to the Wages section.
  4. Locate the Box 14 subsection.
  5. Enter any Ministers housing allowance (SE only).
  6. Scroll down to the Other Information subsection.
  7. Locate the Miscellaneous Information subsection.
  8. Enter a 1 in Minister wages: 1=subject to SE tax, 2=not subject to SE tax.

Follow these steps to enter a minister's Schedule C:

  1. Go to Screen 16, Business Income (Sch. C).
  2. Scroll down to the Other Information section.
  3. Check the box labeled Minister's Schedule C.
  4. Scroll down to the Income section.
  5. Enter any applicable income fields.
  6. Scroll down to the Expenses section.
  7. Enter any applicable expenses.
 

According to IRS Pub 517, for members of the clergy and religious workers, if the minister has nontaxable parsonage, a portion of the ministers Schedule C or 2106 expenses should be allocated to this nontaxable parsonage and disallowed as an expense on Schedule C or 2106.

  1. Go to Screen 45, Other Taxes.
  2. Scroll down to the Self-Employment Tax (Schedule SE) section.
  3. Select the Name or number of minister's Schedule C.
  4. Select the Name or number of minister's 2106.
    • When this entry is made, and Form (Screen 30, code 226) is set to either Form 2106 or Form 2106/Schedule SE, Lacerte will allocate a portion of the expenses entered in this screen to a minister's nontaxable parsonage.
    • Since the parsonage allowance is subjected to SE tax, the expenses allocated to the parsonage will reduce Schedule C income included on Schedule SE.
  5. Locate the Minister's Parsonage Allowance subsection.
  6. Enter the Parsonage allowance received - housing.
  7. If the actual amount of the housing expenses are less, enter that amount in Actual Housing Expenses (If different from amount received).
    • The minister's parsonage is nontaxable income, but is included on Schedule SE and subjected to the SE tax.
 

Don't enter amounts in the fields from steps 11-14 that have already been entered on Screen 10, Wages, Salaries, Tips (W-2).

Follow these steps to enter minister's expenses on Form 2106:

  1. Go to Screen 30, Vehicle/Emp. Bus. Expense (2106).
  2. Under the Vehicle / Employee Business Expense (2106) section, enter the applicable Form (Ctrl+T).
  3. Enter the Activity name or number(Ctrl+T).
  4. Check the box labeled Minister's expenses.
    • When this box is checked and the Form is set to either Form 2106 or Form 2106/Schedule SE, the program will allocate a portion of the expenses entered in this screen to a minister's nontaxable parsonage.
  5. Enter any applicable expenses.

Follow these steps to enter the minister's business use of home:

  1. Go to Screen 29, Business Use of Home (8829).
  2. Use the steps in this article to enter business use of home expenses, if you haven't already.
  3. Go to Screen 45, Other Taxes.
  4. Scroll down to the Self-Employment Tax (Schedule SE) section.
  5. Select the Name or number of the minister's home office.
    • When this entry is made, and the Form entered in Business Use of Home is set to Schedule A, a portion of the expenses computed on Form 8829 will be allocated to nontaxable parsonage and disallowed.

Self-employment Tax (Schedule SE) also contains additional input, adjustments, and overrides for ministers which can be utilized to adjust any calculations. Some of the items included are listed below:

  • Exempt and filed Form 4361 (Screen 45.1, code 8)
  • Exempt and filed Form 4029 (Screen 45.1, code 9)
  • Parsonage allowance received for utilities (Screen 45.1, code 74 for taxpayer, code 75 for spouse)

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