Accepted Answer

Hello,

Thanks for your question. First of all, are you sure you should use Form 1099 instead of W-2 to report his earnings? See this areticle: http://www.admin-assist.com/blog_detail/28_Reporting_The_Minister_W_2_or_1099

If the church provides the minister with Form 1099-Misc, premiums paid by the church for medical coverage and any pastorial expenses must be included as taxable income. The minister then could claim any expenses as deductions on Schedule C.

 

The housing allowance must be designated in advance and be recorded in church minutes. This housing allowance is excluded from the Form 1099-MISC.

The amount which can be excluded is limited by IRS (Section 107) to the least of:

1. Amount designated by the church,
2. Amount actually spent on housing for the year by the minister, or
3. Fair rental value of house, furniture, and utilities.

Form more information see IRS Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Hope this helps!
Sincerely,


Edited by JK_CPA on 11/5/2009 at 6:50 PM

Expert:	JK_CPA
Pos. Feedback:	100.0 %
Accepts:
Answered:	11/5/2009

Certified Public Accountant (CPA)

with 5 years accounting experience and 18 years tax experience.