Enter zero in Box 1 on W-2 if all salary is designates as housing allowance?

We have a part time minister who earns 7500/year which our Board has designated entirely as housing allowance. He has opted to have us withhold taxes to cover his SECA liability and does NOT file quarterly taxes. Does this mean that Box 1 on W-2 should be "zero" with the housing allowance entered in Box 14 and voluntary withholding amount in Box 2?

Comments for Enter zero in Box 1 on W-2 if all salary is designates as housing allowance?

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Jan 23, 2014
volunteer withholding
by: Sandi

It looks like you would need to put the volunteer withholding in box 1:
Pub 517 "Amounts included in gross income.
5.Any amount a church pays toward your income tax or SE tax, other than withholding the amount from your salary. This amount is also subject to income tax."

prayers

Jan 23, 2014
Voluntary Withholdings with No Actual Wage
by: Vickey

I'm not sure you can withhold any taxes when there is no actual wage (amounts in box 1) to hold it out against...even if it was voluntary:(

If you have already sent these amounts to the government...it's time to contact a tax professional familiar with minister's taxes.

I've never encountered this particular issue and frankly am at a loss as how to handle it.

If you do contact a CPA or tax professional, could you post what they advise? I'm curious and maybe it would help others in the same situation:)

Jan 23, 2014
Enter zero in Box 1 on W-2
by: Anonymous MN

To follow discussion

Jan 24, 2014
Comments for Enter zero in Box 1 on W-2 if all salary is designates as housing allowance?
by: Jason

I have a similar situation/question. I'm a part time Associate Pastor. I'm strictly paid with a housing allowance and nothing else. Nothing is withheld and I do not receive a W2 (or 1099). I'm curious how to file this, as I know that I need to pay the Self Employment tax on the amount for SS and Medicare. How do I input this into my online tax prep? Do just create/add a "mock" W2 to my income section, listing the church as the employer and simply leave all boxes blank, except for inputting the housing allowance into box 14? Thank you for any insight!

Jan 24, 2014
housing only
by: Sandi

your church can just give you a letter with the amount on it,
then you just use the IRS worksheet

use pub 505 and 517

http://www.irs.gov/publications/p517/ar02.html#en_US_2012_publink100033704

http://www.irs.gov/pub/irs-pdf/p505.pdf

prayers

Jan 24, 2014
housing only
by: Jason

Thank you, Sandi, for the direction and quick response!

Feb 05, 2014
Social sec and med withhold last year
by: Anonymous

Hi Sandi,
I'm a pastor and last year the church withhold soc sec and Medicare every paycheck and they paid 941 quarterly. Is it possible to eliminate withholding for this year. Thanks.
Marvin

Feb 06, 2014
withholding
by: Sandi

Marvin,
sounds like you need to update your W-4. You should also read IRS pub 517.
Vickey knows more about these things than I do, I just do a lot of search on the IRS site and the sitesearch (located to the right)of this sight :-)

prayers

Feb 06, 2014
Issuing a W-2
by: Jewel

Our church is fairly new (about 3 years) & last year was the first year our Pastor was paid a salary. We rent space for Sunday services but everything else takes place at his home i.e. bible study, women's ministry meetings, youth activities, men's ministry meetings, choir practice, etc.
We based his salary on his house rent and an average of monthly utilities expense.
He is the only paid church employee & there was no withholding.
Should I, as church treasurer, issue him a W-2?

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