W-2 Question

by M True
(Amarillo, TX)

I need help filling out our Pastor’s W2. His salary is $60,000 with no withholding on income tax, social security or medicare tax. The housing allowance designated from the board is $20,000. He filled out a housing allowance form and reported $18,000 for housing expenses. He also contributed $2500 to a 401K. What is the proper way to fill out the W2 box 1 and box 12 and box 14?

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Jan 24, 2015
W-2 Question clarification?
by: Lewis in NC

Is the $20,000 housing allowance set up within the $60,000 salary or is it paid as an additional cash payment? Did the church administration set up the 401K for the minister and withhold money from his pay and send it to some retirement investment company for him (I am assuming this is what happened and I am just asking for confirmation)?

Jan 29, 2015
W2 question
by: Anonymous

The 20000 housing allowance is not a cash payment and the 401K is a payroll deduction from each paycheck set up by the church

Jan 31, 2015
W-2 Question
by: Lewis in NC

Since your church is keeping a file of actual housing expenses from the minister, the exclusion from income taxes for housing would be $18,000. Also, the $2500 would be excluded from income taxes for the 401K. So in Box 1 put $39,500 ($60,000-$18000-$2500) as the taxable income. In box 12A put Code D and the amount of $2500 if this is a 401K Simple IRA. In Box 14 it is optional as to whether you put $20,000 as the approved housing allowance. Since the exclusion for actual housing expense is only $18,000, I believe I would opt to leave 14 blank.

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