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CHURCH ACCOUNTING PACKAGE

Housing Allowance less than house rent

by paul
(durham nc)

I am a pastor and the board of the church of which I am also an incorporator and president agreed to give me a housing allowance. All the amounts I receive is a housing allowance and my monthly rent is more than the Housing allowance. Do I report the housing allowance I receive on Schedule C as Gross Receipts and my Rent on Other expense?

Vickey's reply

No. You would report the lesser amount presumably your housing allowance on a Schedule SE. You will owe self-employment tax (Social Security tax) on the amount, but not income tax. See this page for more details.

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