How to do W-2

If a pastor of a small church had a housing allowance only for pay (and it was the smallest of housing expenses actually pd, housing allowance designated and fair rental value) so there wasn't any taxes withheld because it was all housing allowance, and now it might not be the smallest of the three how do you fill out a w-2?

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Do NOT Withhold Taxes from a Housing Allowance
by: Vickey

First of all let me state that no church should ever withhold taxes from housing allowance payments....which you didn' you are good =)

Housing allowance payments should also never be reported on a 1099 and or in Box 1 of a W-2.

You can report those housing allowance payments in Box 14 of a W-2 though.

Or you can just inform the minister of the amount of those payments in a written notice at the end of the year.

A copy of the notification should be maintained in the church’s file.

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