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:
- Go to Screen 10, Wages, Salaries Tips.
- Enter information from the W-2, including all income and applicable withholding.
- Scroll down to the Wages section.
- Locate the Box 14 subsection.
- Enter any Ministers housing allowance (SE only).
- Scroll down to the Other Information subsection.
- Locate the Miscellaneous Information subsection.
- 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:
- Go to Screen 16, Business Income (Sch. C).
- Scroll down to the Other Information section.
- Check the box labeled Minister's Schedule C.
- Scroll down to the Income section.
- Enter any applicable income fields.
- Scroll down to the Expenses section.
- 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.
- Go to Screen 45, Other Taxes.
- Scroll down to the Self-Employment Tax (Schedule SE) section.
- Select the Name or number of minister's Schedule C.
- 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.
- Locate the Minister's Parsonage Allowance subsection.
- Enter the Parsonage allowance received - housing.
- 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:
- Go to Screen 30, Vehicle/Emp. Bus. Expense (2106).
- Under the Vehicle / Employee Business Expense (2106) section, enter the applicable Form (Ctrl+T).
- Enter the Activity name or number(Ctrl+T).
- 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.
- Enter any applicable expenses.
Follow these steps to enter the minister's business use of home:
- Go to Screen 29, Business Use of Home (8829).
- Use the steps in this article to enter business use of home expenses, if you haven't already.
- Go to Screen 45, Other Taxes.
- Scroll down to the Self-Employment Tax (Schedule SE) section.
- 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.
