Using the example - I believe you are saying the "cash" amount received for the year is $25,000.
What happened to the $9,000? It isn't subtracted from anything.
Is the actual gross $25,000 + $9,000 for $34,000 but then you subtracted out the $9,000 because a minister doesn't pay income tax on housing and the reported about on line 1 of the W2 is $25,000 + car allowance and SS.
You didn't subtract the $9,000???
We are trying to work this out with our minister now being an employee. His "cash" annual is $70k. The designated parsonage allowance (no actual outlay of cost for him but his "use" for being minister) for rental and upkeep at $56k.
So is the amount we report on line 1 of the W2 $70k (as his gross would be $70k plus $56k) or $70k minus $56,000 for $14k.
I guess the question is this - is the $56,000 a part of the $70k so we subtract the two or is it in addition to and we add the $56k to the $70k to get to the gross?
Thank you. I have read about everything I can and still have trouble understanding it.