How do I claim allowable deductions as a minister when my minister pay is reported only on a W2?

Follow these steps in this order to report your allowable deductions:
  1. Fill out Worksheet 1 and Worksheet 3 from Publication 517 .

  2. View your Schedule SE as we've calculated it. If the total amount we included on Schedule SE, Line 2 doesn't include the amount you figured in Worksheet 3 correctly, you'll need to make an adjustment.

    To make an adjustment, you'll need to add a Schedule C. Add $1 in income and $1 in expenses. Once you get to the Your Business screen, click the Edit button next to Less Common Expenses. Continue until you get to the Self-Employment Tax Adjustments screen and answer Yes to the question that asks if you have other adjustments to your self-employment income. When you get to the Other Adjustments screen, enter your adjustment there.

  3. Once you're ready to file your return, you'll need to mail it so you can include Worksheet 1 and Worksheet 3 with your return. If you added a Schedule C with $1 in income and $1 in expenses in Step 3, don't include that in the return you mail to the IRS.
Note: Unreimbursed business expenses incurred as a church employee are no longer deductible as an itemized deduction.

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