I'm having tremendous difficulty with the two clergy returns I have- getting the atx program to deduct their housing cost or allowance from income and dealing with the rules.
On one return, (retired clergy) she gets a pension of 6000 per year (box 1) , and it comes from Fidelity as a w-2. There is no amount listed as "housing allowance" in box 14 but I have a letter from the Board of Benefits services from her denomination stating that up to 100 percent can be designated housing allowance. Box 11 nonqalified plans filled in at 6000.00. When I fill in the w-2 record on ATX and designate "Clergy" in wage type, it does not remove the 6000 from line 7 of her 1040 and in fact it ends up adding the amount to her se taxes, increasing her tax bill! Even when I fill in box 14 with a 6000 housing allowance (even though it's not filled in on the w-2) it still does not remove the 6000 from line 7 1040. I've tried filling in the 1040 Clergy worksheet a million differet ways, called ATX and still cant get this to work.
I'm burning tons of time on this, and am charging very little to the clients- if someone could offer some help I'd really appreciate it.
Another question- the other clergyperson gets his penion income from the church on a 1099- I can't figure out a way to get a housing allowance to take in the program in that case either. Is there a reason why one gets a w-2 and the other a 1099?
