What if minister under-declared housing for entire year?

by Anne
(Roseville CA)

Before the new year comes, our pastor's fill out and sign a Salary Alignment detailing how much they are designating for their Base Salary and Housing Allowance.


One of our pastor's reported 21,000 as housing allowance and 19,000 and his base salary for 2015. He went to do his taxes and "thought" he had increased his housing allowance mid-year when he purchased his first home.

His accountant wants me to amend his W-2. Is that legal or necessary? How can you increase your housing allowance therefore decreasing Base-Salary after-the-fact?

Comments for What if minister under-declared housing for entire year?

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Apr 09, 2016
 Under-declared housing?
by: Lewis in NC

If the minister in question is earning $40,000 with $21,000 as a proactively approved housing allowance and the remaining $19,000 as the taxable portion (your statement about this is very unclear) then on the W-2 you put $19,000 in Box 1 and you can put $21,000 in Box 14 as the housing allowance.

Since housing allowances must be approved "proactively", (that is) before the tax year they are applied to, the housing allowance cannot be adjusted for a tax year that just ended for the additional amount spent on housing during that same year. Sorry, hope this helps.
Apr 09, 2016
 Clarification
by: Anne

Yes, you understood me correctly that his total compensation is $40,000 with $21,000 as housing allowance and $19,000 as taxable (base salary).

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