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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 3375
Experience:  Over 20 Years experience
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DO CATHOLIC PRIESTS HAVE TO INCLUDE THE FMV OF THEIR PROVIDED

Customer Question

DO CATHOLIC PRIESTS HAVE TO INCLUDE THE FMV OF THEIR PROVIDED LIVING IN THEIR SOCIAL SECURITY TAX CALCULATIONS, IF SO HOW DO YOU DO THAT IF THERE IS NO VALUE ESTABLISHED BY THE CHURCH
Submitted: 3 years ago.
Category: Tax
Expert:  R. Klein, EA replied 3 years ago.

Randalltax :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

Randalltax :

Yes, unless you are exempt, you include the Fair Market Value of the parsonage or provided living quarters as taxable to Social Security.

Randalltax :

The church or organization is supposed to provide that value to you.

Randalltax :

Did you receive a W-2?

Randalltax :

Are you preparing a tax return in TurboTax, or by hand? or some other method?

JACUSTOMER-t84nan2t- :

yes, I do have a w2 for the priest but the church doesn't give any information on the value of housing, right now I have the entire w2 subject to social security, do I need to add an additional amount for the housing

JACUSTOMER-t84nan2t- :

hi are you still working with me on this question or is that the end of our interaction, thanks

Randalltax :

I can come in an out of the session.

Randalltax :

Are you working in a software like TurboTax?

JACUSTOMER-t84nan2t- :

yes, prosystems,

Randalltax :

I do not know that package.

Randalltax :

In any case, you will need to figure out how to first determine the amount, then second, include it in Schedule SE

JACUSTOMER-t84nan2t- :

pro systems fx by intuit,

Randalltax :

The package is not by Intuit.

Randalltax :

I work for Intuit.

Randalltax :

Intuit has ProSeries, TurboTax and Lacerte only.

Randalltax :

ProSeries and ProSystems are not the same.

JACUSTOMER-t84nan2t- :

Proseries

Randalltax :

fx is a professional package.

Randalltax :

OK.

Randalltax :

However, I do not work with Proseries regularly. It may be similar to TurboTax in that you enter this amount of housing allowance on the W-2 worksheet.

Randalltax :

It auotmatically carries to the right place.

JACUSTOMER-t84nan2t- :

How do you go about figuring the value of the housing, the amount in box 1 of the w2 represents the cash he recieved for salary

Randalltax :

It is not part of the W-2 itself, but there are additional entries on the worksheet

JACUSTOMER-t84nan2t- :

no entries on the worksheet

Randalltax :

Again, the FMV of housing cannot be determined by "an outsider".

Randalltax :

Like I said earlier, I do not know the particulars of that software, my aplogies

JACUSTOMER-t84nan2t- :

Okay, so if the church doesn't designate it, then you as the preparer can't? my question sis not about the package but about tax law, thanks

Randalltax :

The preparer cannot make up data. The client must come up with the number.

Randalltax :

I always lay the responsibility for the numbers to go into the return on the client.

JACUSTOMER-t84nan2t- :

I understand that, I'm not sure who does the returns for the church and the payroll process, I was hoping to be able to go back to the priest and give him some thoughts so he could talk to the person responsible in regards to how to do that.

Randalltax :

That, my friend, falls into my category of "not my problem". I simply tell the client I need a value. How he gets it is his problem. It is unlikely that this is the first time the priest has had this question.

Randalltax :

I'm not being mean...

Randalltax :

It's just that I cannot provide information or tell someone how to get information.

JACUSTOMER-t84nan2t- :

Thanks

Randalltax :

Have a great weekend