pastor green received an annual salary of $20,000 as a full-time minister in 2021. the church also paid him $1,000 designated as a housing allowance to pay for his utilities. his church owns a parsonage that has a fair rental value of $6,000 in which he lives rent-free. neither the rental allowance nor the rental value of the parsonage is included in his w-2. all amounts are considered provided for services he renders as a licensed pastor. he is not exempt from self-employment tax. compute the amount of pastor green's income that is subject to income tax on his 2021 return.

Ministers may exclude from gross income the rental value of a home or a rental allowance to the extent the allowance is used to provide a home, even if deductions are taken for home expenses paid with the allowance.

Generally, coins allowances are taken into consideration for taxable earnings to the employee, like wages and salaries. A cash allowance might also talk to an incentive used by automobile dealerships as promotional attention or money paid with the aid of mothers and fathers to their youngsters for finishing numerous household chores or tasks.

The expense account or allowance will inform you how plenty of cash is being spent to run your business while an allowance, mainly, tells you the way plenty of cash is being reimbursed to employees for prices.

There are three distinct styles of allowances. Those 3 sorts of allowances include: non-taxable, in part taxable, and taxable. Reimbursement: a charge made by using the business enterprise to the worker to cover expenses is called compensation.

Learn more about allowances here https://brainly.com/question/14191260

#SPJ4