Housing Allowance Expenditures

Question regarding housing allowance expenditures:

Where on form 1040 do we report expenditures for the "housing allowance" category?

Answer

You don’t. You will need to report your “eligible” housing allowance income on your schedule SE.

When it comes to actually claiming the exclusion for the housing allowance…it is limited to the lesser of:

1. The amount actually spent on eligible housing expenses.
   
2. The fair market rental value plus furnishings and utilities.
   
3. The amount officially designated in advance as housing allowance.

The housing allowance you include on your IRS Schedule SE will always be the lower of these three items.

If there were any excess housing allowance monies received over the amount eligible for the exclusion reported on the SE form, you would need to report it as regular income.

My Church contributions ebook package includes a bonus ebook on a housing allowance that explains in detail about managing and reporting a housing allowance. It also includes a spreadsheet for keeping track of your housing allowance expenditures which you will need along with proper backup recipts and documents in case you were audited by the IRS.

Hope this helps.



Church Accounting Package

www.freechurchaccounting.com