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1040ez Tax File

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1040ez Tax File

1040ez tax file 20. 1040ez tax file   Deducción Estándar Table of Contents Qué Hay de Nuevo Introduction Cantidad de la Deducción Estándar Deducción Estándar para DependientesDefinición del ingreso del trabajo. 1040ez tax file Quién Debe Detallar las DeduccionesCuándo detallar las deducciones. 1040ez tax file Personas casadas que presentan la declaración por separado. 1040ez tax file Qué Hay de Nuevo Aumento de la deducción estándar. 1040ez tax file  La deducción estándar para ciertos contribuyentes que no detallen sus deducciones en el Anexo A del Formulario 1040 es mayor en el año 2013 de lo que fue en el año 2012. 1040ez tax file La cantidad de la deducción depende de su estado civil para efectos de la declaración. 1040ez tax file Puede utilizar las Tablas de Deducción Estándar para el año 2013 en este capítulo para calcular la deducción estándar. 1040ez tax file Introduction Este capítulo trata sobre los siguientes temas: Cómo calcular la cantidad de su deducción estándar. 1040ez tax file La deducción estándar para dependientes. 1040ez tax file Quién debe detallar las deducciones. 1040ez tax file La mayoría de los contribuyentes tienen la opción de tomar la deducción estándar o detallar sus deducciones. 1040ez tax file Si tene la opción, puede utilizar el método que resulte en la cantidad menor de impuestos. 1040ez tax file La deducción estándar es una cantidad en dólares que reduce su ingreso tributable. 1040ez tax file La deducción estándar es un beneficio que, para muchos contribuyentes, elimina la necesidad de detallar deducciones, tales como gastos médicos, aportaciones hechas a obras caritativas, e impuestos, en el Anexo A del Formulario 1040. 1040ez tax file La deducción estándar es mayor para los contribuyentes que: Tengan 65 años de edad o más o Sean ciegos. 1040ez tax file Usted se beneficia de la deducción estándar si ésta es mayor que el total de las deducciones detalladas permisibles. 1040ez tax file Personas que no reúnen los requisitos para la deducción estándar. 1040ez tax file   Su deducción estándar es cero y debe detallar todas las deducciones que tenga si: Su estado civil para efectos de la declaración es casado que presenta la declaración por separado y su cónyuge detalla las deducciones en su propia declaración, Presenta una declaración de impuestos para un año tributario corto debido a un cambio en su período contable anual, o Es extranjero no residente o extranjero con doble residencia durante el año. 1040ez tax file Se le considera extranjero con doble residencia si tuvo estatus de ambos extranjero no residente y extranjero residente durante el año. 1040ez tax file Nota. 1040ez tax file Si es extranjero no residente que está casado con un ciudadano estadounidense o es residente extranjero al final del año, puede elegir ser tratado como residente estadounidense. 1040ez tax file Vea la Publicación 519, U. 1040ez tax file S. 1040ez tax file Tax Guide for Aliens (Guía sobre los impuestos federales estadounidenses para extranjeros), en inglés. 1040ez tax file Si elige esta opción, puede tomar la deducción estándar. 1040ez tax file Si alguna exención suya puede ser reclamada en la declaración de impuestos de otra persona (tal como la declaración de sus padres), es posible que su deducción estándar sea limitada. 1040ez tax file Vea Deducción Estándar para Dependientes , más adelante. 1040ez tax file Cantidad de la Deducción Estándar La cantidad de la deducción estándar depende de su estado civil para efectos de la declaración, si tiene 65 años de edad o más o es ciego, y si otro contribuyente puede reclamar una exención por usted. 1040ez tax file Generalmente, las cantidades de deducción estándar se ajustan cada año, conforme a la inflación. 1040ez tax file La cantidad de la deducción estándar para la mayoría de los contribuyentes se muestra en la Tabla 20-1. 1040ez tax file Declaración final de un fallecido. 1040ez tax file   La deducción estándar para la declaración final de impuestos de un fallecido es igual a la que hubiese sido si el fallecido hubiese seguido con vida. 1040ez tax file No obstante, si el fallecido no tenía 65 años de edad o más al morir, no puede reclamar la deducción estándar más alta, concedida por cumplir esa edad. 1040ez tax file Deducción Estándar Más Alta por Edad (65 Años de Edad o Más) Si tiene 65 años de edad o más el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. 1040ez tax file Se considera que tiene 65 años de edad el día antes de cumplir sus 65 años. 1040ez tax file Por lo tanto, puede tomar una deducción estándar más alta para el año 2013 si nació antes del 2 de enero de 1949. 1040ez tax file Utilice la Tabla 20-2 para calcular la cantidad de la deducción estándar. 1040ez tax file Deducción Estándar Más Alta por Ceguera Si es ciego en el último día del año y no detalla sus deducciones, tiene derecho a una deducción estándar más alta. 1040ez tax file No está totalmente ciego. 1040ez tax file   Si no está totalmente ciego, tiene que obtener una declaración certificada de un oftalmólogo u optometrista que indique que: Aún cuando tiene sus espejuelos o lentes de contacto puestos, su ojo mejor no registra una cifra de vista mejor que el 20/200 o Su campo visual es de 20 grados o menos. 1040ez tax file   Si es poco probable que la condición de su vista vaya a mejorar más allá de estos límites, dicha declaración debería estipular este hecho. 1040ez tax file Tiene que guardar esta declaración con sus registros. 1040ez tax file   Si su vista se puede corregir más allá de estos límites únicamente con lentes de contacto que sólo pueda usar durante un corto lapso de tiempo debido a dolor, infección o úlceras, usted puede tomar la deducción estándar más alta por ceguera si reúne los demás requisitos. 1040ez tax file Cónyuge de 65 Años o Más o Ciego Puede tomar la deducción estándar mayor si su cónyuge tiene 65 años o más de edad o está ciego y: Ustedes presentan una declaración conjunta o Usted presenta una declaración separada y reclama una exención por su cónyuge porque el mismo no tuvo ningún ingreso bruto; y otro contribuyente no pudo haber reclamado a su cónyuge como dependiente. 1040ez tax file No puede tomar la deducción estándar más alta por una persona que no sea usted o su cónyuge. 1040ez tax file Ejemplos Los siguientes ejemplos muestran cómo determinar su deducción estándar utilizando la Tabla 20-1 y 20-2. 1040ez tax file Ejemplo 1. 1040ez tax file Carlos, de 46 años de edad, y Ana, de 33 años de edad, presentan una declaración conjunta en el año 2013. 1040ez tax file Ninguno de los dos es ciego ni puede ser reclamado como dependiente. 1040ez tax file Ellos optan por no detallar sus deducciones. 1040ez tax file Ellos utilizan la Tabla 20-1. 1040ez tax file La deducción estándar para ambos es $12,200. 1040ez tax file Ejemplo 2. 1040ez tax file Los datos son los mismos que en el Ejemplo 1, salvo que Carlos está ciego al final del año 2013. 1040ez tax file Carlos y Ana utilizan la Tabla 20-2. 1040ez tax file La deducción estándar para ambos es $13,400. 1040ez tax file Ejemplo 3. 1040ez tax file Roberto y María presentan una declaración conjunta para 2013. 1040ez tax file Los dos son mayores de 65 años de edad. 1040ez tax file Ninguno de los dos es ciego y ninguno de los dos puede ser reclamado como dependiente. 1040ez tax file Si ellos no detallan las deducciones, utilizan la Tabla 20-2. 1040ez tax file Su deducción estándar es $14,600. 1040ez tax file Deducción Estándar para Dependientes La deducción estándar de una persona quien otra persona puede reclamar como dependiente en su declaración de impuestos suele limitarse a la cantidad siguiente que sea mayor: $1,000 o El ingreso del trabajo de la persona para el año, más $350 (pero no en exceso de la cantidad normal de la deducción estándar, generalmente $6,100). 1040ez tax file Sin embargo, la deducción estándar podría ser más alta si la persona tiene 65 años de edad o más o si es ciego. 1040ez tax file Si alguna exención suya (o de su cónyuge si presentan una declaración conjunta) se puede reclamar en la declaración de impuestos de otra persona, utilice la Tabla 20-3 para determinar su deducción estándar. 1040ez tax file Definición del ingreso del trabajo. 1040ez tax file   El ingreso del trabajo corresponde a salarios, sueldos, propinas, honorarios por servicios profesionales y otras cantidades recibidas como pagos por trabajo que usted de hecho realiza. 1040ez tax file    Para propósitos de la deducción estándar, el ingreso del trabajo también incluye toda parte de una beca de estudios o de una beca de desarrollo profesional que usted tenga que incluir en el ingreso bruto. 1040ez tax file Vea Becas de estudios y becas de desarrollo profesional en el capítulo 12, para más información sobre qué se considera una beca de estudios o una beca de desarrollo profesional. 1040ez tax file Ejemplo 1. 1040ez tax file Miguel es soltero. 1040ez tax file Sus padres reclaman una exención por él en su declaración de impuestos del año 2013. 1040ez tax file Tiene ingresos de intereses de $780 y un salario de $150. 1040ez tax file No tiene deducciones detalladas. 1040ez tax file Miguel utiliza la Tabla 20-3 para calcular su deducción estándar. 1040ez tax file Él anota $150 (su ingreso del trabajo) en la línea 1, $500 ($150 + $350) en la línea 3, $1,000 (la cantidad mayor entre $500 y $1,000) en la línea 5, y $6,100 en la línea 6. 1040ez tax file Su deducción estándar, la cual se anota en la línea 7a, es de $1,000 (la cantidad menor entre $1,000 y $6,100). 1040ez tax file Ejemplo 2. 1040ez tax file José, un estudiante universitario a tiempo completo con 22 años de edad, puede ser reclamado como dependiente en la declaración de impuestos del año 2013 de sus padres. 1040ez tax file José está casado y presenta una declaración por separado. 1040ez tax file Su esposa no detalla sus deducciones en su declaración. 1040ez tax file José tiene ingresos de intereses de $1,500 y un salario de $3,800. 1040ez tax file Él no tiene deducciones detalladas. 1040ez tax file José utiliza la Tabla 20-3 para calcular su deducción estándar. 1040ez tax file Él anota su ingreso de trabajo de $3,800 en la línea 1. 1040ez tax file Él suma las líneas 1 y 2 y anota $4,150 en la línea 3. 1040ez tax file En la línea 5, él anota $4,150, la cantidad mayor entre las líneas 3 y 4. 1040ez tax file Ya que José está casado y presenta una declaración por separado, él anota $6,100 en la línea 6. 1040ez tax file En la línea 7a, él anota $4,150, como su deducción estándar, porque es menos de $6,100, la cantidad en la línea 6. 1040ez tax file Ejemplo 3. 1040ez tax file Carla, que es soltera, puede ser reclamada como dependiente en la declaración de impuestos del año 2013 de sus padres. 1040ez tax file Tiene 18 años de edad y es ciega. 1040ez tax file Tiene ingresos de intereses de $1,300 y un salario de $2,900. 1040ez tax file Ella no tiene deducciones detalladas. 1040ez tax file Carla consulta la Tabla 20-3 para encontrar su deducción estándar. 1040ez tax file Ella anota su salario de $2,900 en la línea 1. 1040ez tax file Suma las líneas 1 y 2 y anota $3,250 en la línea 3. 1040ez tax file En la línea 5, anota $3,250, la mayor entre las líneas 3 y 4. 1040ez tax file Ya que ella es soltera, Carla anota $6,100 en la línea 6. 1040ez tax file Anota $3,250 en la línea 7a. 1040ez tax file Esta es la menor entre las cantidades de las líneas 5 y 6. 1040ez tax file Ya que ella marcó el recuadro en la parte superior de la hoja, ella anota $1,500 en la línea 7b. 1040ez tax file Luego, suma las cantidades de las líneas 7a y 7b y anota su deducción estándar de $4,750 en la línea 7c. 1040ez tax file Ejemplo 4. 1040ez tax file Edgardo es soltero. 1040ez tax file Sus padres pueden reclamar una exención por él en su declaración del 2013. 1040ez tax file Su salario es de $7,000, tiene ingresos por intereses de $500, y pérdida de negocio de $3,000. 1040ez tax file Él no tiene deducciones detalladas. 1040ez tax file Edgardo utiliza la Tabla 20-3 para calcular su deducción estándar. 1040ez tax file Él anota $4,000 ($7,000 - $ 3,000) en la línea 1. 1040ez tax file Suma las líneas 1 y 2 y anota $4,350 en la línea 3. 1040ez tax file En la línea 5, anota $4,350, la cantidad mayor entre las líneas 3 y 4. 1040ez tax file Ya que él es soltero, Edgardo anota $6,100 en la línea 6. 1040ez tax file En la línea 7a, anota $4,350 como su deducción estándar porque es menor de $6,100, la cantidad que fue anotada en la línea 6. 1040ez tax file Quién Debe Detallar las Deducciones Debe detallar las deducciones si el total de las mismas es mayor que la cantidad de la deducción estándar. 1040ez tax file Además, debe detallar las deducciones si no reúne los requisitos para la deducción estándar, según se explicó anteriormente bajo Personas que no reúnen los requisitos para la deducción estándar . 1040ez tax file Debe calcular primero las deducciones detalladas y comparar aquella cantidad con su deducción estándar para asegurarse de estar utilizando el método que le brinda el mayor beneficio. 1040ez tax file Puede estar sujeto a un límite en algunas de sus deducciones detalladas si su ingreso bruto ajustado es mayor que: $250,000 si es soltero ($275,000 si es cabeza de familia, $300,000 si es casado que presenta una declaración conjunta o viudo(a) que reúne los requisitos; o $150,000 si es casado que presenta la declaración por separado). 1040ez tax file Vea el capítulo 29 o las instrucciones para el Anexo A (Formulario 1040) para más información sobre cómo calcular la cantidad exacta de sus deducciones detalladas. 1040ez tax file Cuándo detallar las deducciones. 1040ez tax file   Es posible que le convenga detallar sus deducciones en el Anexo A (Formulario 1040) si usted: No reúne los requisitos para la deducción estándar o la cantidad que puede reclamar está limitada, Tuvo gastos médicos o dentales cuantiosos que no fueron cubiertos por su seguro durante el año, Pagó intereses e impuestos sobre su vivienda, Tuvo gastos de negocio del empleado cuantiosos que no fueron reembolsados por su empleador u otras deducciones misceláneas, Tuvo pérdidas por hechos fortuitos o por robo cuantiosas que no fueron cubiertas por su seguro, Hizo aportaciones cuantiosas a instituciones de caridad calificadas, o Tiene deducciones detalladas cuyo total es mayor que la deducción estándar a la que, por lo demás, tiene derecho. 1040ez tax file Estas deducciones se explican en los capítulos 21 al 28. 1040ez tax file   Si decide detallar las deducciones, complete el Anexo A y adjúntelo a su Formulario 1040. 1040ez tax file Anote la cantidad de la línea 29 del Anexo A en la línea 40 del Formulario 1040. 1040ez tax file Puede optar por detallar las deducciones para impuestos estatales u otros propósitos. 1040ez tax file   Aun si sus deducciones detalladas son menos que su deducción estándar, puede optar por detallar sus deducciones en la declaración de impuestos federales en vez de tomar la deducción estándar. 1040ez tax file Es posible que le convenga hacer esto si, por ejemplo, el beneficio tributario de detallar sus deducciones en la declaración de impuestos estatales es mayor que el beneficio tributario que pierde si no toma la deducción estándar en la declaración de impuestos federales. 1040ez tax file Para elegir esta opción, tiene que marcar el recuadro de la línea 30 del Anexo A. 1040ez tax file Si cambia de idea. 1040ez tax file   Si no detalla las deducciones y más tarde se da cuenta de que debió haberlas detallado –o si detalla las deducciones y más tarde se da cuenta de que no debió haberlo hecho– puede cambiar su declaración de impuestos presentando el Formulario 1040X, Amended U. 1040ez tax file S. 1040ez tax file Individual Income Tax Return (Declaración enmendada del impuesto federal sobre el ingreso personal en los Estados Unidos), en inglés. 1040ez tax file Vea Declaraciones Enmendadas y Solicitudes de Reembolso en el capítulo 1 para más información sobre las declaraciones enmendadas. 1040ez tax file Personas casadas que presentan la declaración por separado. 1040ez tax file   Puede cambiar de método para tomar deducciones sólo si usted y su cónyuge hacen los mismos cambios. 1040ez tax file Cada uno de los dos tienen que presentar una autorización para permitir la determinación de impuestos adicionales que cualquiera de ustedes pueda adeudar como resultado de dicho cambio. 1040ez tax file    Usted y su cónyuge pueden utilizar el método que les resulte en el total de impuestos más bajo, aunque uno de ustedes quizá pague más impuestos de los que hubiera pagado al utilizar el otro método. 1040ez tax file Tanto usted como su cónyuge tienen que utilizar el mismo método para reclamar deducciones. 1040ez tax file Si uno de ustedes detalla sus deducciones, el otro debe detallar sus deducciones también, porque él o ella no reunirá los requisitos para la deducción estándar. 1040ez tax file Vea Personas que no reúnen los requisitos para la deduccón estándar , anteriormente. 1040ez tax file Tablas de Deducción Estándar para el 2013 Si usted es casado que presenta la declaración por separado y su cónyuge detalla las deducciones, o si usted es extranjero con doble residencia, no puede tomar la deducción estándar aunque haya nacido antes del 2 de enero de 1949 o sea ciego. 1040ez tax file Tabla 20-1. 1040ez tax file Tabla de Deducción Estándar para la Mayoría de las Personas* Si su estado civil para efectos de la  declaración es Entonces su  deducción  estándar es: Soltero o casado que presenta la declaración por separado $6,100 Casado que presenta la declaración conjunta o viudo(a) que reúne los requisitos con hijo dependiente 12,200 Cabeza de familia 8,950 * No utilice esta tabla si nació antes del 2 de enero de 1949, o es ciego, o si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). 1040ez tax file En vez de ésta, utilice la Tabla 20-2 ó 20-3. 1040ez tax file Tabla 20-2. 1040ez tax file Tabla de la Deducción Estándar para Personas que Nacieron Antes del 2 de enero de 1949 o que sean ciegas* Marque el número correcto de recuadros siguientes. 1040ez tax file Luego pase a la tabla. 1040ez tax file Usted: Nació antes del  2 de enero de 1949□ Es ciego□ Su cónyuge, si reclama  una exención por él o ella: Nació antes del  2 de enero de 1949 □ Es ciego□ Número total de recuadros que marcó   SI su estado civil para   efectos de la  declaración es Y el número en el  recuadro de arriba es ENTONCES su deducción  estándar es: Soltero 1 $7,600   2 9,100 Casado que presenta la 1 $13,400 declaración conjunta o 2 14,600 viudo(a) que reúne los requisitos 3 15,800 con hijo dependiente 4 17,000 Casado que presenta 1 $7,300 la declaración por separado 2 8,500   3 9,700   4 10,900 Cabeza de familia 1 $10,450   2 11,950 *Si alguien más puede reclamar una exención por usted (o su cónyuge, si presenta la declaración conjunta), utilice la tabla 20-3, en vez de ésta. 1040ez tax file Tabla 20-3. 1040ez tax file Tabla de Deducción Estándar para Dependientes Utilice esta hoja de trabajo sólo si alguien más puede reclamar una exención por usted (o por su cónyuge, si es casado que presenta la declaración conjuntamente). 1040ez tax file Marque el número correcto de recuadros más abajo. 1040ez tax file Luego pase a la hoja de trabajo. 1040ez tax file Usted:   Nació antes del 2 de enero de 1949 □ Es ciego □ Su cónyuge, si reclama una exención por él o ella: Nació antes del 2 de enero de 1949 □ Es ciego □ Número total de recuadros que marcó 1. 1040ez tax file Anote su ingreso del trabajo (definido más abajo). 1040ez tax file Si no tiene ninguno, anote -0-. 1040ez tax file 1. 1040ez tax file   2. 1040ez tax file Cantidad adicional. 1040ez tax file 2. 1040ez tax file $350 3. 1040ez tax file Sume las líneas 1 y 2. 1040ez tax file 3. 1040ez tax file   4. 1040ez tax file Deducción estándar mínima. 1040ez tax file 4. 1040ez tax file $1,000 5. 1040ez tax file De las líneas 3 ó 4, anote la cantidad mayor. 1040ez tax file 5. 1040ez tax file   6. 1040ez tax file Anote una de las cantidades siguientes según su estado civil para efectos de la declaración. 1040ez tax file Soltero o Casado que presenta la declaración por separado—$6,100 Casado que presenta la declaración conjunta—$12,200 Cabeza de familia—$8,950 6. 1040ez tax file   7. 1040ez tax file Deducción estándar. 1040ez tax file         a. 1040ez tax file De las líneas 5 ó 6, anote la cantidad que sea menor. 1040ez tax file Si nació después del 1 de enero de 1949, y no es ciego, pare. 1040ez tax file Ésta es su deducción estándar. 1040ez tax file De lo contrario, pase a la línea 7b. 1040ez tax file 7a. 1040ez tax file     b. 1040ez tax file Si nació antes del 2 de enero de 1949, o si es ciego, multiplique $1,500 ($1,200 si es casado) por la cifra en la línea de arriba. 1040ez tax file 7b. 1040ez tax file     c. 1040ez tax file Sume las líneas 7a y 7b. 1040ez tax file Ésta es su deducción estándar para el año 2013. 1040ez tax file 7c. 1040ez tax file   El ingreso del trabajo incluye salarios, sueldos, propinas, honorarios por servicios profesionales y otras remuneraciones recibidas por servicios personales que usted prestó. 1040ez tax file También incluye toda cantidad recibida por concepto de beca que deba incluir en sus ingresos. 1040ez tax file Prev  Up  Next   Home   More Online Publications
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Starting a Business

Listed below are links to basic federal tax information for people who are starting a business, as well as information to assist in making basic business decisions. The list should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business.

Information about specific industries can be found on the Industries/Professions Web page.

For information regarding state-level requirements for starting and operating a business, please refer to your state's Web site.

What New Business Owners Need to Know About Federal Taxes

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The 1040ez Tax File

1040ez tax file Publication 517 - Main Content Table of Contents Social Security CoverageCoverage of Members of the Clergy Coverage of Religious Workers (Church Employees) U. 1040ez tax file S. 1040ez tax file Citizens and Resident and Nonresident Aliens Ministerial ServicesMinisters Members of Religious Orders Christian Science Practitioners and Readers Exemption From Self-Employment (SE) TaxMembers of the Clergy Members of Recognized Religious Sects Self-Employment Tax: Figuring Net EarningsRegular Method Nonfarm Optional Method Income Tax: Income and ExpensesIncome Items Expense Items Income Tax Withholding and Estimated Tax Filing Your Return Retirement Savings ArrangementsDeducting contributions to tax-sheltered annuity plans. 1040ez tax file Full-time student. 1040ez tax file Adjusted gross income. 1040ez tax file More information. 1040ez tax file Earned Income Credit Comprehensive ExampleForm W-2 From Church Form W-2 From College Schedule C-EZ (Form 1040) Form 2106-EZ Schedule A (Form 1040) Schedule SE (Form 1040) Form 1040 Attachment 1 Attachment 2 How To Get Tax HelpLow Income Taxpayer Clinics Social Security Coverage This section gives information about which system (SECA or FICA) is used to collect social security and Medicare taxes from members of the clergy (ministers, members of a religious order, and Christian Science practitioners and readers) and religious workers (church employees). 1040ez tax file Coverage of Members of the Clergy The services you perform in the exercise of your ministry, of the duties required by your religious order, or of your profession as a Christian Science practitioner or reader are covered by social security and Medicare under SECA. 1040ez tax file Your earnings for these ministerial services (defined later) are subject to self-employment (SE) tax unless one of the following applies. 1040ez tax file You are a member of a religious order who has taken a vow of poverty. 1040ez tax file You ask the Internal Revenue Service (IRS) for an exemption from SE tax for your services and the IRS approves your request. 1040ez tax file See Exemption From Self-Employment (SE) Tax , later. 1040ez tax file You are subject only to the social security laws of a foreign country under the provisions of a social security agreement between the United States and that country. 1040ez tax file For more information, see Bilateral Social Security (Totalization) Agreements in Publication 54. 1040ez tax file Your earnings that are not from ministerial services may be subject to social security tax under FICA or SECA according to the rules that apply to taxpayers in general. 1040ez tax file See Ministerial Services , later. 1040ez tax file Ministers If you are a minister of a church, your earnings for the services you perform in your capacity as a minister are subject to SE tax, even if you perform these services as an employee of that church. 1040ez tax file However, you can request that the IRS grant you an exemption, as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez tax file For the specific services covered, see Ministerial Services , later. 1040ez tax file Ministers defined. 1040ez tax file   Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. 1040ez tax file Ministers have the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination. 1040ez tax file   If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes. 1040ez tax file Employment status for other tax purposes. 1040ez tax file   Even though all of your income from performing ministerial services is subject to self-employment tax for social security tax purposes, you may be an employee for income tax or retirement plan purposes in performing those same services. 1040ez tax file For income tax or retirement plan purposes, your income earned as an employee will be considered wages. 1040ez tax file Common-law employee. 1040ez tax file   Under common-law rules, you are considered either an employee or a self-employed person. 1040ez tax file Generally, you are an employee if you perform services for someone who has the legal right to control both what you do and how you do it, even if you have considerable discretion and freedom of action. 1040ez tax file For more information about the common-law rules, see Publication 15-A, Employer's Supplemental Tax Guide. 1040ez tax file   If a congregation employs you and pays you a salary, you are generally a common-law employee and income from the exercise of your ministry is wages for income tax purposes. 1040ez tax file However, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal services, are not wages; such amounts are self-employment income for both income tax purposes and social security tax purposes. 1040ez tax file Example. 1040ez tax file A church hires and pays you a salary to perform ministerial services subject to its control. 1040ez tax file Under the common-law rules, you are an employee of the church while performing those services. 1040ez tax file Form SS-8. 1040ez tax file   If you are not certain whether you are an employee or a self-employed person, you can get a determination from the IRS by filing Form SS-8. 1040ez tax file Members of Religious Orders If you are a member of a religious order who has not taken a vow of poverty, your earnings for ministerial services you perform as a member of the order are subject to SE tax. 1040ez tax file See Ministerial Services , later. 1040ez tax file However, you can request that the IRS grant you an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez tax file Vow of poverty. 1040ez tax file   If you are a member of a religious order and have taken a vow of poverty, you are already exempt from paying SE tax on your earnings for ministerial services you perform as an agent of your church or its agencies. 1040ez tax file You do not need to request a separate exemption. 1040ez tax file For income tax purposes, the earnings are tax free to you. 1040ez tax file Your earnings are considered the income of the religious order. 1040ez tax file Services covered under FICA at the election of the order. 1040ez tax file   However, even if you have taken a vow of poverty, the services you perform for your church or its agencies may be covered under social security. 1040ez tax file Your services are covered if your order, or an autonomous subdivision of the order, elects social security coverage for its current and future vow-of-poverty members. 1040ez tax file   The order or subdivision elects coverage by filing Form SS-16. 1040ez tax file The election may cover certain vow-of-poverty members for a retroactive period of up to 20 calendar quarters before the quarter in which it files the certificate. 1040ez tax file If the election is made, the order or subdivision pays both the employer's and employee's share of the tax. 1040ez tax file You do not pay any of the FICA tax. 1040ez tax file Services performed outside the order. 1040ez tax file   Even if you are a member of a religious order who has taken a vow of poverty and the order requires you to turn over amounts you earn, your earnings are subject to federal income tax and either SE tax or FICA tax (including estimated tax payments and/or withholding) if you: Are self-employed or an employee of an organization outside your religious community, and Perform work not required by, or done on behalf of, the order. 1040ez tax file   In these cases, your income from self-employment or as an employee of that outside organization is taxable to you directly. 1040ez tax file You may, however, be able to take a charitable deduction for the amount you turn over to the order. 1040ez tax file See Publication 526, Charitable Contributions. 1040ez tax file Rulings. 1040ez tax file   Organizations and individuals may request rulings from the IRS on whether they are religious orders, or members of a religious order, respectively, for FICA tax, SE tax, and federal income tax withholding purposes. 1040ez tax file To request a ruling, follow the procedures in Revenue Procedure 2014-1, 2014-1 I. 1040ez tax file R. 1040ez tax file B. 1040ez tax file 1, available at www. 1040ez tax file irs. 1040ez tax file gov/irb/2014-1_IRB/ar05. 1040ez tax file html. 1040ez tax file Christian Science Practitioners and Readers Generally, your earnings from services you perform in your profession as a Christian Science practitioner or reader are subject to SE tax. 1040ez tax file However, you can request an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez tax file Practitioners. 1040ez tax file   Christian Science practitioners are members in good standing of the Mother Church, The First Church of Christ, Scientist, in Boston, Massachusetts, who practice healing according to the teachings of Christian Science. 1040ez tax file State law specifically exempts Christian Science practitioners from licensing requirements. 1040ez tax file   Some Christian Science practitioners also are Christian Science teachers or lecturers. 1040ez tax file Income from teaching or lecturing is considered the same as income from their work as practitioners. 1040ez tax file Readers. 1040ez tax file   For tax purposes, Christian Science readers are considered the same as ordained, commissioned, or licensed ministers. 1040ez tax file Coverage of Religious Workers (Church Employees) If you are a religious worker (a church employee) and are not in one of the classes already discussed, your wages are generally subject to social security and Medicare tax under FICA, not SECA. 1040ez tax file Some exceptions are discussed next. 1040ez tax file Election by Church To Exclude Its Employees From FICA Coverage Churches and qualified church-controlled organizations (church organizations) that are opposed for religious reasons to the payment of social security and Medicare taxes can elect to exclude their employees from FICA coverage. 1040ez tax file If your employer makes this election, it does not pay the employer's portion of the FICA taxes or withhold from your pay your portion of the FICA taxes. 1040ez tax file Instead, your wages are subject to SECA and you must pay SE tax on your wages if they exceed $108. 1040ez tax file 28 during the tax year. 1040ez tax file However, you can request an exemption from SE tax if you are a member of a recognized religious sect, as discussed below. 1040ez tax file Churches and church organizations make this election by filing two copies of Form 8274. 1040ez tax file For more information about making this election, see Form 8274. 1040ez tax file Election by Certain Church Employees Who Are Opposed to Social Security and Medicare You may be able to choose to be exempt from social security and Medicare taxes, including the SE tax, if you are a member of a recognized religious sect or division and work for a church (or church-controlled nonprofit division) that does not pay the employer's part of the social security tax on wages. 1040ez tax file This exemption does not apply to your service, if any, as a minister of a church or as a member of a religious order. 1040ez tax file Make this choice by filing Form 4029. 1040ez tax file See Requesting Exemption—Form 4029 , later, under Members of Recognized Religious Sects. 1040ez tax file U. 1040ez tax file S. 1040ez tax file Citizens and Resident and Nonresident Aliens To be covered under the SE tax provisions (SECA), individuals generally must be citizens or resident aliens of the United States. 1040ez tax file Nonresident aliens are not covered under SECA unless a social security agreement in effect between the United States and the foreign country determines that you are covered under the U. 1040ez tax file S. 1040ez tax file social security system. 1040ez tax file To determine your alien status, see Publication 519, U. 1040ez tax file S. 1040ez tax file Tax Guide for Aliens. 1040ez tax file Residents of Puerto Rico, the U. 1040ez tax file S. 1040ez tax file Virgin Islands, Guam, the CNMI, and American Samoa. 1040ez tax file   If you are a resident of one of these U. 1040ez tax file S. 1040ez tax file possessions but not a U. 1040ez tax file S. 1040ez tax file citizen, for SE tax purposes you are treated the same as a citizen or resident alien of the United States. 1040ez tax file For information on figuring the tax, see Self-Employment Tax: Figuring Net Earnings , later. 1040ez tax file Ministerial Services Ministerial services, in general, are the services you perform in the exercise of your ministry, in the exercise of your duties as required by your religious order, or in the exercise of your profession as a Christian Science practitioner or reader. 1040ez tax file Income you receive for performing ministerial services is subject to SE tax unless you have an exemption as explained later. 1040ez tax file Even if you have an exemption, only the income you receive for performing ministerial services is exempt. 1040ez tax file The exemption does not apply to any other income. 1040ez tax file The following discussions provide more detailed information on ministerial services of ministers, members of a religious order, and Christian Science practitioners and readers. 1040ez tax file Ministers Most services you perform as a minister, priest, rabbi, etc. 1040ez tax file , are ministerial services. 1040ez tax file These services include: Performing sacerdotal functions, Conducting religious worship, and Controlling, conducting, and maintaining religious organizations (including the religious boards, societies, and other integral agencies of such organizations) that are under the authority of a religious body that is a church or denomination. 1040ez tax file You are considered to control, conduct, and maintain a religious organization if you direct, manage, or promote the organization's activities. 1040ez tax file A religious organization is under the authority of a religious body that is a church or denomination if it is organized for and dedicated to carrying out the principles of a faith according to the requirements governing the creation of institutions of the faith. 1040ez tax file Services for nonreligious organizations. 1040ez tax file   Your services for a nonreligious organization are ministerial services if the services are assigned or designated by your church. 1040ez tax file Assigned or designated services qualify even if they do not involve performing sacerdotal functions or conducting religious worship. 1040ez tax file   If your services are not assigned or designated by your church, they are ministerial services only if they involve performing sacerdotal functions or conducting religious worship. 1040ez tax file Services that are not part of your ministry. 1040ez tax file   Income from services you perform as an employee that are not ministerial services is subject to social security and Medicare tax withholding under FICA (not SECA) under the rules that apply to employees in general. 1040ez tax file The following are not ministerial services. 1040ez tax file Services you perform for nonreligious organizations other than the services stated above. 1040ez tax file Services you perform as a duly ordained, commissioned, or licensed minister of a church as an employee of the United States, the District of Columbia, a foreign government, or any of their political subdivisions. 1040ez tax file These services are not ministerial services even if you are performing sacerdotal functions or conducting religious worship. 1040ez tax file (For example, if you perform services as a chaplain in the Armed Forces of the United States, those services are not ministerial services. 1040ez tax file ) Services you perform in a government-owned and operated hospital. 1040ez tax file (These services are considered performed by a government employee, not by a minister as part of the ministry. 1040ez tax file ) However, services that you perform at a church-related hospital or health and welfare institution, or a private nonprofit hospital, are considered to be part of the ministry and are considered ministerial services. 1040ez tax file Books or articles. 1040ez tax file   Writing religious books or articles is considered to be in the exercise of your ministry and is considered a ministerial service. 1040ez tax file   This rule also applies to members of religious orders and to Christian Science practitioners and readers. 1040ez tax file Members of Religious Orders Services you perform as a member of a religious order in the exercise of duties required by the order are ministerial services. 1040ez tax file The services are considered ministerial because you perform them as an agent of the order. 1040ez tax file For example, if the order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to perform the services as an agent of the order. 1040ez tax file However, if the order directs you to work outside the order, this employment will not be considered a duty required by the order unless: Your services are the kind that are ordinarily performed by members of the order, and Your services are part of the duties that must be exercised for, or on behalf of, the religious order as its agent. 1040ez tax file Effect of employee status. 1040ez tax file   Ordinarily, if your services are not considered directed or required of you by the order, you and the outside party for whom you work are considered employee and employer. 1040ez tax file In this case, your earnings from the services are taxed under the rules that apply to employees in general, not under the rules for services provided as agent for the order. 1040ez tax file This result is true even if you have taken a vow of poverty. 1040ez tax file Example. 1040ez tax file Pat Brown and Chris Green are members of a religious order and have taken vows of poverty. 1040ez tax file They renounce all claims to their earnings. 1040ez tax file The earnings belong to the order. 1040ez tax file Pat is a licensed attorney. 1040ez tax file The superiors of the order instructed her to get a job with a law firm. 1040ez tax file Pat joined a law firm as an employee and, as she requested, the firm made the salary payments directly to the order. 1040ez tax file Chris is a secretary. 1040ez tax file The superiors of the order instructed him to accept a job with the business office of the church that supervises the order. 1040ez tax file Chris took the job and gave all his earnings to the order. 1040ez tax file Pat's services are not duties required by the order. 1040ez tax file Her earnings are subject to social security and Medicare tax under FICA and to federal income tax. 1040ez tax file Chris' services are duties required by the order. 1040ez tax file He is acting as an agent of the order and not as an employee of a third party. 1040ez tax file He does not include the earnings in gross income, and they are not subject to income tax withholding or to social security and Medicare tax under FICA or SECA. 1040ez tax file Christian Science Practitioners and Readers Services you perform as a Christian Science practitioner or reader in the exercise of your profession are ministerial services. 1040ez tax file Amounts you receive for performing these services are generally subject to SE tax. 1040ez tax file You may request an exemption from SE tax, discussed next, which applies only to those services. 1040ez tax file Exemption From Self-Employment (SE) Tax You can request an exemption from SE tax if you are a member of the clergy (minister, member of a religious order, or Christian Science practitioner or reader) or a member of a recognized religious sect. 1040ez tax file Generally, members of religious orders who have taken a vow of poverty are already exempt from paying SE tax, as discussed earlier under Members of Religious Orders under Social Security Coverage. 1040ez tax file They do not have to request the exemption. 1040ez tax file Who cannot be exempt. 1040ez tax file   You cannot be exempt from SE tax if you made one of the following elections to be covered under social security. 1040ez tax file These elections are irrevocable. 1040ez tax file You elected to be covered under social security by filing Form 2031, Revocation of Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners, for your 1986, 1987, 2000, or 2001 tax year. 1040ez tax file You elected before 1968 to be covered under social security for your ministerial services. 1040ez tax file Requesting exemption. 1040ez tax file    Table 2, earlier, briefly summarizes the procedure for requesting exemption from the SE tax. 1040ez tax file More detailed explanations follow. 1040ez tax file If you are a minister, member of a religious order, or Christian Science practitioner, an approved exemption only applies to earnings you receive for ministerial services, discussed earlier. 1040ez tax file It does not apply to any other self-employment income. 1040ez tax file Table 2. 1040ez tax file The Self-Employment Tax Exemption Application and Approval Process   Who Can Apply Members of the Clergy Members of Recognized  Religious Sects How File Form 4361 File Form 4029 When File by the due date (including extensions) of your income tax return for the second tax year in which you had at least $400 of net earnings from self-employment (at least part from ministerial services) File anytime Approval If approved, you will receive an approved copy of Form 4361 If approved, you will receive an approved copy of Form 4029 Effective Date For all tax years after 1967 in which you have at least $400 of net earnings from self-employment For all tax years beginning with the first year you meet the eligibility requirements discussed later Members of the Clergy To claim the exemption from SE tax, you must meet all of the following conditions. 1040ez tax file You file Form 4361, described below under Requesting Exemption—Form 4361 . 1040ez tax file You are conscientiously opposed to public insurance because of your individual religious considerations (not because of your general conscience), or you are opposed because of the principles of your religious denomination. 1040ez tax file You file for other than economic reasons. 1040ez tax file You inform the ordaining, commissioning, or licensing body of your church or order that you are opposed to public insurance if you are a minister or a member of a religious order (other than a vow-of-poverty member). 1040ez tax file This requirement does not apply to Christian Science practitioners or readers. 1040ez tax file You establish that the organization that ordained, commissioned, or licensed you, or your religious order, is a tax-exempt religious organization. 1040ez tax file You establish that the organization is a church or a convention or association of churches. 1040ez tax file You did not make an election discussed earlier under Who cannot be exempt . 1040ez tax file You sign and return the statement the IRS mails to you to certify that you are requesting an exemption based on the grounds listed on the statement. 1040ez tax file Requesting Exemption—Form 4361 To request exemption from SE tax, file Form 4361 in triplicate (original and two copies) with the IRS. 1040ez tax file The IRS will return to you a copy of the Form 4361 that you filed indicating whether it has approved your exemption. 1040ez tax file If it is approved, keep the approved copy of Form 4361 in your permanent records. 1040ez tax file When to file. 1040ez tax file   File Form 4361 by the date your income tax return is due, including extensions, for the second tax year in which both of the following are true. 1040ez tax file You have net earnings from self-employment of at least $400. 1040ez tax file Any part of those net earnings was from ministerial services you performed as a: Minister, Member of a religious order, or Christian Science practitioner or reader. 1040ez tax file The 2 years do not have to be consecutive tax years. 1040ez tax file    The approval process can take some time, so you should file Form 4361 as soon as possible. 1040ez tax file Example 1. 1040ez tax file Rev. 1040ez tax file Lawrence Jaeger, a clergyman ordained in 2013, has net self-employment earnings as a minister of $450 in 2013 and $500 in 2014. 1040ez tax file He must file his application for exemption by the due date, including extensions, for his 2014 income tax return. 1040ez tax file However, if Rev. 1040ez tax file Jaeger does not receive IRS approval for an exemption by April 15, 2015, his SE tax for 2014 is due by that date. 1040ez tax file Example 2. 1040ez tax file Rev. 1040ez tax file Louise Wolfe has only $300 in net self-employment earnings as a minister in 2013, but earned more than $400 in 2012 and expects to earn more than $400 in 2014. 1040ez tax file She must file her application for exemption by the due date, including extensions, for her 2014 income tax return. 1040ez tax file However, if she does not receive IRS approval for an exemption by April 15, 2015, her SE tax for 2014 is due by that date. 1040ez tax file Example 3. 1040ez tax file In 2011, Rev. 1040ez tax file David Moss was ordained a minister and had $700 in net self-employment earnings as a minister. 1040ez tax file In 2012, he received $1,000 as a minister, but his related expenses were over $1,000. 1040ez tax file Therefore, he had no net self-employment earnings as a minister in 2012. 1040ez tax file Also in 2012, he opened a book store and had $8,000 in net self-employment earnings from the store. 1040ez tax file In 2013, he had net self-employment earnings of $1,500 as a minister and $10,000 net self-employment earnings from the store. 1040ez tax file Rev. 1040ez tax file Moss had net earnings from self-employment in 2011 and 2013 that were $400 or more each year, and part of the self-employment earnings in each of those years was for his services as a minister. 1040ez tax file Thus, he must file his application for exemption by the due date, including extensions, for his 2013 income tax return. 1040ez tax file Death of individual. 1040ez tax file   The right to file an application for exemption ends with an individual's death. 1040ez tax file A surviving spouse, executor, or administrator cannot file an exemption application for a deceased clergy member. 1040ez tax file Effective date of exemption. 1040ez tax file   An approved exemption is effective for all tax years after 1967 in which you have $400 or more of net earnings from self-employment and any part of those earnings is for services as a member of the clergy. 1040ez tax file Once the exemption is approved, it is irrevocable. 1040ez tax file Example. 1040ez tax file Rev. 1040ez tax file Trudy Austin, ordained in 2010, had $400 or more in net self-employment earnings as a minister in both 2010 and 2013. 1040ez tax file She files an application for exemption on February 20, 2014. 1040ez tax file If an exemption is granted, it is effective for 2010 and the following years. 1040ez tax file Refunds of SE tax. 1040ez tax file   If, after receiving an approved Form 4361, you find that you overpaid SE tax, you can file a claim for refund on Form 1040X. 1040ez tax file Generally, for a refund, you must file Form 1040X within 3 years from the date you filed the return or within 2 years from the date you paid the tax, whichever is later. 1040ez tax file A return you filed, or tax you paid, before the due date is considered to have been filed or paid on the due date. 1040ez tax file   If you file a claim after the 3-year period but within 2 years from the time you paid the tax, the credit or refund will not be more than the tax you paid within the 2 years immediately before you file the claim. 1040ez tax file Members of Recognized Religious Sects If you are a member of a recognized religious sect, or a division of a recognized religious sect, you can apply for an exemption from payment of social security and Medicare taxes on both your self-employment income and the wages you earn from an employer who also has an exemption. 1040ez tax file Exception. 1040ez tax file   If you received social security benefits or payments, or anyone else received these benefits or payments based on your wages or self-employment income, you cannot apply. 1040ez tax file However, if you pay your benefits back, you may be considered for exemption. 1040ez tax file Contact your local Social Security Administration office to find out the amount you must pay back. 1040ez tax file Eligibility requirements. 1040ez tax file   To claim this exemption from SE tax, all the following requirements must be met. 1040ez tax file You must file Form 4029, discussed later under Requesting Exemption—Form 4029 . 1040ez tax file As a follower of the established teachings of the sect or division, you must be conscientiously opposed to accepting benefits of any private or public insurance that makes payments for death, disability, old age, retirement, or medical care, or provides services for medical care. 1040ez tax file You must waive all rights to receive any social security payment or benefit and agree that no benefits or payments will be made to anyone else based on your wages and self-employment income. 1040ez tax file The Commissioner of Social Security must determine that: Your sect or division has the established teachings as described in (2) above, It is the practice, and has been for a substantial period of time, for members of the sect or division to provide for their dependent members in a manner that is reasonable in view of the members' general level of living, and The sect or division has existed at all times since December 31, 1950. 1040ez tax file Requesting Exemption—Form 4029 To request the exemption, file Form 4029 in triplicate (original and two copies) with the Social Security Administration at the address shown on the form. 1040ez tax file The sect or division must complete part of the form. 1040ez tax file The IRS will return to you a copy of the Form 4029 that you filed indicating whether it has approved your exemption. 1040ez tax file If it is approved, keep the approved copy of Form 4029 in your permanent records. 1040ez tax file When to file. 1040ez tax file   You can file Form 4029 at any time. 1040ez tax file   If you have an approved exemption from SE tax and for some reason that approved exemption ended, you must file a new Form 4029 if you subsequently meet the eligibility requirements, discussed earlier. 1040ez tax file See Effective date of exemption next for information on when the newly approved exemption would become effective. 1040ez tax file    If you have a previously approved exemption from SE tax and you change membership to another recognized religious sect, without any change to your eligibility requirements, then you do not need to file a new Form 4029. 1040ez tax file Effective date of exemption. 1040ez tax file   An approved exemption from SE tax generally is effective for all tax years beginning with the first year you meet the eligibility requirements discussed earlier. 1040ez tax file (For example, if you meet the eligibility requirements in 2011, you file Form 4029 in 2012, and the IRS approves your exemption in 2013, your exemption is effective for tax year 2011 and all later years. 1040ez tax file )   The exemption will end if you fail to meet the eligibility requirements or if the Commissioner of Social Security determines that the sect or division fails to meet them. 1040ez tax file You must notify the IRS within 60 days if you are no longer a member of the religious group, or if you no longer follow the established teachings of this group. 1040ez tax file The exemption will end for the tax year where you or your sect/division first fails to meet the eligibility requirements. 1040ez tax file Refunds of SE tax paid. 1040ez tax file    To get a refund of any SE tax you paid while the exemption was in effect, file Form 1040X. 1040ez tax file For information on filing this form, see Refunds of SE tax under Requesting Exemption—Form 4361, earlier. 1040ez tax file Exemption From FICA Taxes Generally, under FICA, the employer and the employee each pay half of the social security and Medicare tax. 1040ez tax file Both the employee and the employer, if they meet the eligibility requirements discussed earlier, can apply to be exempt from their share of FICA taxes on wages paid by the employer to the employee. 1040ez tax file A partnership in which each partner holds a religious exemption from social security and Medicare is an employer for this purpose. 1040ez tax file If the employer's application is approved, the exemption will apply only to FICA taxes on wages paid to employees who also received an approval of identical applications. 1040ez tax file Information for employers. 1040ez tax file   If you have an approved Form 4029 and you have an employee who has an approved Form 4029, do not report wages you paid to the employee as social security and Medicare wages. 1040ez tax file   If you have an employee who does not have an approved Form 4029, you must withhold the employee's share of social security and Medicare taxes and pay the employer's share. 1040ez tax file Form W-2. 1040ez tax file   When preparing a Form W-2 for an employee with an approved Form 4029, enter “Form 4029” in box 14, “Other. 1040ez tax file ” Do not make any entries in boxes 3, 4, 5, or 6. 1040ez tax file Forms 941, 943, and 944. 1040ez tax file   If both you and your employee have received approved Forms 4029, do not include these exempt wages on the following forms. 1040ez tax file Instead, follow the instructions given below. 1040ez tax file Form 941, Employer's QUARTERLY Federal Tax Return: check the box on line 4 and enter “Form 4029” in the empty space below the check box. 1040ez tax file Form 943, Employer's Annual Federal Tax Return for Agricultural Employees: enter “Form 4029” on the dotted line next to the lines 2 and 4 entry spaces. 1040ez tax file Form 944, Employer's ANNUAL Federal Tax Return: check the box on line 3 and enter “Form 4029” in the empty space below the check box. 1040ez tax file Effective date. 1040ez tax file   An approved exemption from FICA becomes effective on the first day of the first calendar quarter after the quarter in which you file Form 4029. 1040ez tax file The exemption will end on the last day of the calendar quarter before the quarter in which the employer, employee, sect, or division fails to meet the requirements. 1040ez tax file Self-Employment Tax: Figuring Net Earnings There are two methods for figuring your net earnings from self-employment as a member of the clergy or a religious worker. 1040ez tax file Regular method. 1040ez tax file Nonfarm optional method. 1040ez tax file You may find Worksheets 1 through 4 helpful in figuring your net earnings from self-employment. 1040ez tax file Blank worksheets are in the back of this publication, after the Comprehensive Example. 1040ez tax file Regular Method Most people use the regular method. 1040ez tax file Under this method, figure your net earnings from self-employment by totaling your gross income for services you performed as a minister, a member of a religious order who has not taken a vow of poverty, or a Christian Science practitioner or reader. 1040ez tax file Then, subtract your allowable business deductions and multiply the difference by 92. 1040ez tax file 35% (. 1040ez tax file 9235). 1040ez tax file Use Schedule SE (Form 1040) to figure your net earnings and SE tax. 1040ez tax file If you are an employee of a church that elected to exclude you from FICA coverage, figure net earnings by multiplying your church wages shown on Form W-2 by 92. 1040ez tax file 35% (. 1040ez tax file 9235). 1040ez tax file Do not reduce your wages by any business deductions when making this computation. 1040ez tax file Use Schedule SE (Form 1040), Section B, to figure your net earnings and SE tax. 1040ez tax file If you have an approved exemption, or you are automatically exempt, do not include the income or deductions from ministerial services in figuring your net earnings from self-employment. 1040ez tax file Amounts included in gross income. 1040ez tax file   To figure your net earnings from self-employment (on Schedule SE (Form 1040)), include in gross income: Salaries and fees for your ministerial services (discussed earlier), Offerings you receive for marriages, baptisms, funerals, masses, etc. 1040ez tax file , The value of meals and lodging provided to you, your spouse, and your dependents for your employer's convenience, The fair rental value of a parsonage provided to you (including the cost of utilities that are furnished) and the rental allowance (including an amount for payment of utilities) paid to you, and Any amount a church pays toward your income tax or SE tax, other than withholding the amount from your salary. 1040ez tax file This amount is also subject to income tax. 1040ez tax file   For the income tax treatment of items (2) and (4), see Income Tax: Income and Expenses , later. 1040ez tax file Example. 1040ez tax file Pastor Roger Adams receives an annual salary of $39,000 as a full-time minister. 1040ez tax file The $39,000 includes $5,000 that is designated as a rental allowance to pay utilities. 1040ez tax file His church owns a parsonage that has a fair rental value of $12,000 per year. 1040ez tax file The church gives Pastor Adams the use of the parsonage. 1040ez tax file He is not exempt from SE tax. 1040ez tax file He must include $51,000 ($39,000 plus $12,000) when figuring his net earnings for SE tax purposes. 1040ez tax file The results would be the same if, instead of the use of the parsonage and receipt of the rental allowance for utilities, Pastor Adams had received an annual salary of $51,000 of which $17,000 ($5,000 plus $12,000) per year was designated as a rental allowance. 1040ez tax file Overseas duty. 1040ez tax file   Your net earnings from self-employment are determined without any foreign earned income exclusion or the foreign housing exclusion or deduction if you are a U. 1040ez tax file S. 1040ez tax file citizen or resident alien serving abroad and living in a foreign country. 1040ez tax file   For information on excluding foreign earned income or the foreign housing amount, see Publication 54. 1040ez tax file Example. 1040ez tax file Diane Jones was the minister of a U. 1040ez tax file S. 1040ez tax file church in Mexico. 1040ez tax file She earned $35,000 in that position and was able to exclude it all for income tax purposes under the foreign earned income exclusion. 1040ez tax file The United States does not have a social security agreement with Mexico, so Mrs. 1040ez tax file Jones is subject to U. 1040ez tax file S. 1040ez tax file SE tax and must include $35,000 when figuring net earnings from self-employment. 1040ez tax file Specified U. 1040ez tax file S. 1040ez tax file possessions. 1040ez tax file    The exclusion from gross income for amounts derived from American Samoa or Puerto Rico does not apply in computing net earnings from self-employment. 1040ez tax file Also see Residents of Puerto Rico, the U. 1040ez tax file S. 1040ez tax file Virgin Islands, Guam, the CNMI, and American Samoa , earlier, under U. 1040ez tax file S. 1040ez tax file Citizens and Resident and Nonresident Aliens. 1040ez tax file Amounts not included in gross income. 1040ez tax file   Do not include the following amounts in gross income when figuring your net earnings from self-employment. 1040ez tax file Offerings that others made to the church. 1040ez tax file Contributions by your church to a tax-sheltered annuity plan set up for you, including any salary reduction contributions (elective deferrals) that are not included in your gross income. 1040ez tax file Pension payments or retirement allowances you receive for your past ministerial services. 1040ez tax file The rental value of a parsonage or a parsonage allowance provided to you after you retire. 1040ez tax file Allowable deductions. 1040ez tax file   When figuring your net earnings from self-employment, deduct all your expenses related to your ministerial services performed as a self-employed person. 1040ez tax file These are ministerial expenses you incurred while working other than as a common-law employee of the church. 1040ez tax file They include expenses incurred in performing marriages and baptisms, and in delivering speeches. 1040ez tax file Deduct these expenses on Schedule C or C-EZ (Form 1040), and carry the net amount to line 2 of Schedule SE (Form 1040), Section A or B. 1040ez tax file   Wages earned as a common-law employee (explained earlier) of a church are generally subject to self-employment tax unless an exemption is requested, as discussed earlier under Exemption From Self-Employment (SE) Tax . 1040ez tax file Subtract any allowable expenses (including unreimbursed employee business expenses) from those wages, include the net amount on line 2 of Schedule SE (Form 1040), Section A or B, and attach an explanation. 1040ez tax file Do not complete Schedule C or C-EZ (Form 1040). 1040ez tax file However, for income tax purposes, the expenses are allowed only as an itemized deduction on Schedule A (Form 1040) to the extent they exceed 2% of adjusted gross income. 1040ez tax file Employee reimbursement arrangements. 1040ez tax file   If you received an advance, allowance, or reimbursement for your employee expenses, how you report this amount and your employee expenses depends on whether your employer reimbursed you under an accountable plan or a nonaccountable plan. 1040ez tax file Ask your employer if you are not sure if it reimburses you using an accountable or a nonaccountable plan. 1040ez tax file Accountable plans. 1040ez tax file   To be an accountable plan, your employer's reimbursement arrangement must include all three of the following rules. 1040ez tax file Your expenses must have a business connection—that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. 1040ez tax file You must adequately account to your employer for these expenses within a reasonable period of time. 1040ez tax file You must return any excess reimbursement or allowance within a reasonable period of time. 1040ez tax file   The reimbursement is not reported on your Form W-2. 1040ez tax file Generally, if your expenses equal your reimbursement, you have no deduction. 1040ez tax file If your expenses are more than your reimbursement, you can deduct your excess expenses for SE tax and income tax purposes. 1040ez tax file Nonaccountable plan. 1040ez tax file   A nonaccountable plan is a reimbursement arrangement that does not meet all three of the rules listed under Accountable plans above. 1040ez tax file In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan. 1040ez tax file Excess reimbursements you fail to return to your employer. 1040ez tax file Reimbursement of nondeductible expenses related to your employer's business. 1040ez tax file   Your employer will combine any reimbursement paid to you under a nonaccountable plan with your wages, salary, or other compensation and report the combined total in box 1 of your Form W-2. 1040ez tax file Since reimbursements under a nonaccountable plan are included in your gross income, you can deduct your related expenses (for SE tax and income tax purposes) regardless of whether they are more than, less than, or equal to your reimbursement. 1040ez tax file   For more information on accountable and nonaccountable plans, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. 1040ez tax file Married Couple Missionary Team If both spouses are duly ordained, commissioned, or licensed ministers of a church and have an agreement that each will perform specific services for which they are paid jointly or separately, they must divide the self-employment income according to the agreement. 1040ez tax file If the agreement is with one spouse only and the other spouse is not paid for any specific duties, amounts received for their services are included only in the self-employment income of the spouse having the agreement. 1040ez tax file Earnings Subject to SE Tax For 2013, the maximum net earnings from self-employment subject to social security (old age, survivors, and disability insurance) tax is $113,700 minus any wages and tips you earned that were subject to social security tax. 1040ez tax file The tax rate for the social security part is 12. 1040ez tax file 4%. 1040ez tax file In addition, all of your net earnings are subject to the Medicare (hospital insurance) part of the SE tax. 1040ez tax file This tax rate is 2. 1040ez tax file 9%. 1040ez tax file The combined self-employment tax rate is 15. 1040ez tax file 3%. 1040ez tax file Additional Medicare Tax. 1040ez tax file   Beginning in 2013, a 0. 1040ez tax file 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. 1040ez tax file Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 1040ez tax file A self-employment loss is not considered for purposes of this tax. 1040ez tax file RRTA compensation is separately compared to the threshold. 1040ez tax file For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 1040ez tax file Nonfarm Optional Method You may be able to use the nonfarm optional method for figuring your net earnings from self-employment. 1040ez tax file In general, the nonfarm optional method is intended to permit continued coverage for social security and Medicare purposes when your income for the tax year is low. 1040ez tax file You may use the nonfarm optional method if you meet all the following tests. 1040ez tax file You are self-employed on a regular basis. 1040ez tax file You meet this test if your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. 1040ez tax file The net earnings can be from either farm or nonfarm earnings or both. 1040ez tax file You have used this method less than 5 prior years. 1040ez tax file (There is a 5-year lifetime limit. 1040ez tax file ) The years do not have to be consecutive. 1040ez tax file Your net nonfarm profits were: Less than $5,024, and Less than 72. 1040ez tax file 189% of your gross nonfarm income. 1040ez tax file If you meet all three tests, use Table 3 to figure your net earnings from self-employment under the nonfarm optional method. 1040ez tax file Table 3. 1040ez tax file Figuring Nonfarm Net Earnings IF your gross nonfarm income is . 1040ez tax file . 1040ez tax file . 1040ez tax file THEN your net earnings are equal to . 1040ez tax file . 1040ez tax file . 1040ez tax file $6,960 or less Two-thirds of your gross nonfarm income. 1040ez tax file More than $6,960 $4,640. 1040ez tax file Actual net earnings. 1040ez tax file   Multiply your total earnings subject to SE tax by 92. 1040ez tax file 35% (. 1040ez tax file 9235) to get actual net earnings. 1040ez tax file Actual net earnings are equivalent to net earnings under the “Regular Method. 1040ez tax file ” More information. 1040ez tax file   For more information on the nonfarm optional method, see Publication 334, Tax Guide for Small Business, and the Schedule SE (Form 1040) instructions. 1040ez tax file Income Tax: Income and Expenses Some income and expense items are treated the same for both income tax and SE tax purposes and some are treated differently. 1040ez tax file Note. 1040ez tax file For purposes of this section, references to members of the clergy are only to ministers or members of a religious order. 1040ez tax file Income Items The tax treatment of offerings and fees, outside earnings, rental allowances, rental value of a parsonage, earnings of members of religious orders, and foreign earned income is discussed here. 1040ez tax file Offerings and Fees If you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. 1040ez tax file , in addition to your salary. 1040ez tax file If the offering is made to the religious institution, it is not taxable to you. 1040ez tax file Outside Earnings If you are a member of a religious organization and you give your outside earnings to the organization, you still must include the earnings in your income. 1040ez tax file However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. 1040ez tax file For more information, see Publication 526. 1040ez tax file Exclusion of Rental Allowance and Fair Rental Value of a Parsonage Ordained, commissioned, or licensed ministers of the gospel may be able to exclude from income tax the rental allowance or fair rental value of a parsonage that is provided to them as pay for their services. 1040ez tax file Services include: Ministerial services, discussed earlier, Administrative duties and teaching at theological seminaries, and The ordinary duties of a minister performed as an employee of the United States (other than as a chaplain in the Armed Forces), a state, possession, political subdivision, or the District of Columbia. 1040ez tax file This exclusion applies only for income tax purposes. 1040ez tax file It does not apply for SE tax purposes, as discussed earlier under Amounts included in gross income under Self-Employment Tax: Figuring Net Earnings. 1040ez tax file Designation requirement. 1040ez tax file   The church or organization that employs you must officially designate the payment as a housing allowance before it makes the payment. 1040ez tax file It must designate a definite amount. 1040ez tax file It cannot determine the amount of the housing allowance at a later date. 1040ez tax file If the church or organization does not officially designate a definite amount as a housing allowance, you must include your total salary in your income. 1040ez tax file   If you are employed and paid by a local congregation, a resolution by a national church agency of your denomination does not effectively designate a housing allowance for you. 1040ez tax file The local congregation must officially designate the part of your salary that is a housing allowance. 1040ez tax file However, a resolution of a national church agency can designate your housing allowance if you are directly employed by the national agency. 1040ez tax file Rental allowances. 1040ez tax file   If you receive in your salary an amount officially designated as a rental allowance (including an amount to pay utility costs), you can exclude the allowance from your gross income if: You use the amount to provide or rent a home, and The amount is not more than reasonable pay for your services. 1040ez tax file   The amount you exclude cannot be more than the fair rental value of the home, including furnishings, plus the cost of utilities. 1040ez tax file Fair rental value of parsonage. 1040ez tax file   You can exclude from gross income the fair rental value of a house or parsonage, including utilities, furnished to you as part of your earnings. 1040ez tax file However, the exclusion cannot be more than the reasonable pay for your services. 1040ez tax file If you pay for the utilities, you can exclude any allowance designated for utility costs, up to your actual cost. 1040ez tax file Example. 1040ez tax file Rev. 1040ez tax file Joanna Baker is a full-time minister. 1040ez tax file The church allows her to use a parsonage that has an annual fair rental value of $24,000. 1040ez tax file The church pays her an annual salary of $67,000, of which $7,500 is designated for utility costs. 1040ez tax file Her actual utility costs during the year were $7,000. 1040ez tax file For income tax purposes, Rev. 1040ez tax file Baker excludes $31,000 from gross income ($24,000 fair rental value of the parsonage plus $7,000 from the allowance for utility costs). 1040ez tax file She will report $60,000 ($59,500 salary plus $500 of unused utility allowance). 1040ez tax file Her income for SE tax purposes, however, is $91,000 ($67,000 salary + $24,000 fair rental value of the parsonage). 1040ez tax file Home ownership. 1040ez tax file   If you own your home and you receive as part of your salary a housing or rental allowance, you may exclude from gross income the smallest of: The amount actually used to provide a home, The amount officially designated as a rental allowance, or The fair rental value of the home, including furnishings, utilities, garage, etc. 1040ez tax file Excess rental allowance. 1040ez tax file   You must include in gross income the amount of any rental allowance that is more than the smallest of: Your reasonable salary, The fair rental value of the home plus utilities, or The amount actually used to provide a home. 1040ez tax file   Include in the total on Form 1040, line 7. 1040ez tax file On the dotted line next to line 7, enter “Excess allowance” and the amount. 1040ez tax file You may deduct the home mortgage interest and real estate taxes paid on your home even though you pay all or part of those expenses with funds you get through a tax-free rental or parsonage allowance. 1040ez tax file However, you can only deduct these expenses as itemized deductions on Schedule A (Form 1040). 1040ez tax file Retired ministers. 1040ez tax file   If you are a retired minister, you can exclude from your gross income the rental value of a home (plus utilities) furnished to you by your church as a part of your pay for past services, or the part of your pension that was designated as a rental allowance. 1040ez tax file However, a minister's surviving spouse cannot exclude the rental value unless the rental value is for ministerial services he or she performs or performed. 1040ez tax file Teachers or administrators. 1040ez tax file   If you are a minister employed as a teacher or administrator by a church school, college, or university, you are performing ministerial services for purposes of the housing exclusion. 1040ez tax file However, if you perform services as a teacher or administrator on the faculty of a nonchurch college, you cannot exclude from your income a housing allowance or the value of a home that the college provides to you. 1040ez tax file    If you live in faculty lodging as an employee of an educational institution or academic health center, all or part of the value of that lodging may be nontaxable under a different rule. 1040ez tax file In Publication 525, see Faculty lodging in the discussion on meals and lodging under Fringe Benefits. 1040ez tax file   If you serve as a minister of music or minister of education, or serve in an administrative or other function of your religious organization, but are not authorized to perform substantially all of the religious duties of an ordained minister in your church (even if you are commissioned as a minister of the gospel), the housing exclusion does not apply to you. 1040ez tax file Theological students. 1040ez tax file   If you are a theological student serving a required internship as a part-time or assistant pastor, you cannot exclude a parsonage or rental allowance from your income unless you are ordained, commissioned, or licensed as a minister. 1040ez tax file Traveling evangelists. 1040ez tax file   You can exclude a designated rental allowance from out-of-town churches if you meet all of the following requirements. 1040ez tax file You are an ordained minister. 1040ez tax file You perform ministerial services at churches located away from your community. 1040ez tax file You actually use the rental allowance to maintain your permanent home. 1040ez tax file Cantors. 1040ez tax file   If you have a bona fide commission and your congregation employs you on a full-time basis to perform substantially all the religious functions of the Jewish faith, you can exclude a rental allowance from your gross income. 1040ez tax file Earnings—Members of Religious Orders Your earnings may be exempt from both income tax and SE tax if you are a member of a religious order who: Has taken a vow of poverty, Receives earnings for services performed as an agent of the order and in the exercise of duties required by the order, and Renounces the earnings and gives them to the order. 1040ez tax file See Members of Religious Orders , earlier, under Social Security Coverage. 1040ez tax file Foreign Earned Income Certain income may be exempt from income tax if you work in a foreign country or in a specified U. 1040ez tax file S. 1040ez tax file possession. 1040ez tax file Publication 54 discusses the foreign earned income exclusion. 1040ez tax file Publication 570, Tax Guide for Individuals With Income From U. 1040ez tax file S. 1040ez tax file Possessions, covers the rules for taxpayers with income from U. 1040ez tax file S. 1040ez tax file possessions. 1040ez tax file You can get these free publications from the Internal Revenue Service at IRS. 1040ez tax file gov or from most U. 1040ez tax file S. 1040ez tax file Embassies or consulates. 1040ez tax file Expense Items The tax treatment of ministerial trade or business expenses, expenses allocable to tax-free income, and health insurance costs is discussed here. 1040ez tax file Ministerial Trade or Business Expenses as an Employee When you figure your income tax, you must itemize your deductions on Schedule A (Form 1040) to claim allowable deductions for ministerial trade or business expenses incurred while working as an employee. 1040ez tax file You also may have to file Form 2106, Employee Business Expenses (or Form 2106-EZ, Unreimbursed Employee Business Expenses). 1040ez tax file You claim these expenses as miscellaneous itemized deductions that are subject to the 2%-of-adjusted-gross-income (AGI) limit. 1040ez tax file See Publication 529 for more information on this limit. 1040ez tax file However, you cannot deduct any of your employee business expenses that are allocable to tax-free income (discussed next). 1040ez tax file Expenses Allocable to Tax-Free Income If you receive a rental or parsonage allowance that is exempt from income tax (tax free), you must allocate a portion of the expenses of operating your ministry to that tax-free income. 1040ez tax file You cannot deduct the portion of your expenses that you allocate to your tax-free rental or parsonage allowance. 1040ez tax file Exception. 1040ez tax file   This rule does not apply to your deductions for home mortgage interest or real estate taxes on your home. 1040ez tax file Figuring the allocation. 1040ez tax file   Figure the portion of your otherwise deductible expenses that you cannot deduct (because you must allocate that portion to tax-free income) by multiplying the expenses by the following fraction:      Tax-free rental or parsonage allowance     All income (taxable and tax free) earned from your ministry           When figuring the allocation, include the income and expenses related to the ministerial duties you perform both as an employee and as a self-employed person. 1040ez tax file    Reduce your otherwise deductible expenses only in figuring your income tax, not your SE tax. 1040ez tax file Example. 1040ez tax file Rev. 1040ez tax file Charles Ashford received $40,000 in earnings for ministerial services consisting of a $28,000 salary for ministerial services performed as an employee, $2,000 for weddings and baptisms performed as a self-employed person, and a $10,000 tax-free parsonage allowance. 1040ez tax file He incurred $4,000 of unreimbursed expenses connected with his earnings for ministerial services. 1040ez tax file $3,500 of the $4,000 is for employee expenses related to his ministerial salary, and $500 is related to the weddings and baptisms he performed as a self-employed person. 1040ez tax file Rev. 1040ez tax file Ashford figures the nondeductible (tax-free) portion of expenses related to his ministerial salary as follows: ($10,000 ÷ $40,000) x $3,500 = $875   Rev. 1040ez tax file Ashford figures the nondeductible (tax-free) portion of expenses related to his wedding and baptism income as follows: ($10,000 ÷ $40,000) x $500 = $125 Required statement. 1040ez tax file   If you receive a tax-free rental or parsonage allowance and have ministerial expenses, attach a statement to your tax return. 1040ez tax file The statement must contain all of the following information. 1040ez tax file A list of each item of taxable ministerial income by source (such as wages, salary, weddings, baptisms, etc. 1040ez tax file ) plus the amount. 1040ez tax file A list of each item of tax-free ministerial income by source (parsonage allowance) plus the amount. 1040ez tax file A list of each item of otherwise deductible ministerial expenses plus the amount. 1040ez tax file How you figured the nondeductible part of your otherwise deductible expenses. 1040ez tax file A statement that the other deductions claimed on your tax return are not allocable to your tax-free income. 1040ez tax file   See the attachments prepared for the Comprehensive Example , later. 1040ez tax file Following the example, you will find blank worksheets for your own use. 1040ez tax file Health Insurance Costs of Self-Employed Ministers If you are self-employed, you may be able to deduct the amount you paid in 2013 for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents. 1040ez tax file If you qualify, you can take this deduction as an adjustment to income on Form 1040, line 29. 1040ez tax file See the Instructions for Form 1040 to figure your deduction. 1040ez tax file The following special rules apply to the self-employed health insurance deduction. 1040ez tax file You cannot take a medical expense deduction on Schedule A (Form 1040) for any expenses you claim for purposes of the self-employed health insurance deduction. 1040ez tax file You cannot take the deduction for any month you are eligible to participate in a subsidized plan of your (or your spouse's) employer. 1040ez tax file The deduction cannot exceed your net earnings from the business under which the insurance plan is established. 1040ez tax file Your net earnings under this rule do not include the income you earned as a common-law employee (discussed earlier) of a church. 1040ez tax file More information. 1040ez tax file   For more information about the self-employed health insurance deduction, see chapter 6 in Publication 535. 1040ez tax file Deduction for SE Tax You can deduct one-half of your SE tax in figuring adjusted gross income. 1040ez tax file This is an income tax deduction only, on Form 1040, line 27. 1040ez tax file Do not claim this deduction in figuring net earnings from self-employment subject to SE tax. 1040ez tax file Income Tax Withholding and Estimated Tax The federal income tax is a pay-as-you-go tax. 1040ez tax file You must pay the tax as you earn or receive income during the year. 1040ez tax file An employee usually has income tax withheld from his or her wages or salary. 1040ez tax file However, your salary is not subject to federal income tax withholding if both of the following conditions apply. 1040ez tax file You are a duly ordained, commissioned, or licensed minister, a member of a religious order (who has not taken a vow of poverty), or a Christian Science practitioner or reader. 1040ez tax file Your salary is for ministerial services (see Ministerial Services , earlier). 1040ez tax file If your salary is not subject to withholding, or if you do not pay enough tax through withholding, you may need to make estimated tax payments to avoid penalties for not paying enough tax as you earn your income. 1040ez tax file You generally must make estimated tax payments if you expect to owe taxes, including SE tax, of $1,000 or more, when you file your return. 1040ez tax file Determine your estimated tax by using the worksheets in Publication 505, Tax Withholding and Estimated Tax. 1040ez tax file Pay the entire estimated tax for 2014 or the first installment by April 15, 2014. 1040ez tax file See Form 1040-ES for the different payment methods. 1040ez tax file The April 15 date applies whether or not your tax home and your abode are outside the United States and Puerto Rico. 1040ez tax file For more information, see chapter 2 of Publication 505. 1040ez tax file If you perform your services as a common-law employee of the church and your salary is not subject to income tax withholding, you can enter into a voluntary withholding agreement with the church to cover any income and SE tax that may be due. 1040ez tax file Filing Your Return You must file an income tax return for 2013 if your gross income was at least the amount shown in the third column of Table 4 above. 1040ez tax file Table 4. 1040ez tax file 2013 Filing Requirements for Most Taxpayers IF your filing status is . 1040ez tax file . 1040ez tax file . 1040ez tax file AND at the end of 2013 you were* . 1040ez tax file . 1040ez tax file . 1040ez tax file THEN file a return if your gross income** was at least . 1040ez tax file . 1040ez tax file . 1040ez tax file single under age 65 65 or older   $10,000 $11,500   married filing jointly*** under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses)   $20,000  $21,200  $22,400   married filing separately any age   $3,900   head of household under 65 65 or older   $12,850 $14,350   qualifying widow(er) with dependent child under 65 65 or older   $16,100  $17,300   * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. 1040ez tax file ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). 1040ez tax file Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2013, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). 1040ez tax file If (a) or (b) applies, see the instructions for Form 1040, lines 20a and 20b, to figure the taxable part of social security benefits you must include in gross income. 1040ez tax file Gross income includes gains, but not losses, reported on Form 8949 or Schedule D (Form 1040). 1040ez tax file Gross income from a business means, for example, the amount on Schedule C (Form 1040), line 7, or Schedule F (Form 1040), line 9. 1040ez tax file But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C (Form 1040), line 7, or Schedule F (Form 1040), line 9. 1040ez tax file *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900, you must file a return regardless of your age. 1040ez tax file Additional requirements. 1040ez tax file   Even if your income was less than the amount shown in Table 4, you must file an income tax return on Form 1040, and attach a completed Schedule SE (Form 1040), if:    You are not exempt from SE tax, and you have net earnings from self-employment (discussed earlier under Self-Employment Tax: Figuring Net Earnings ) of $400 or more in the tax year, You are exempt from SE tax on earnings from ministerial services and you have $400 or more of other net earnings subject to SE tax, or You had wages of $108. 1040ez tax file 28 or more from an electing church or church-controlled organization (see Coverage of Religious Workers (Church Employees) , earlier, under Social Security Coverage). 1040ez tax file Self-employment tax. 1040ez tax file   If you are liable for SE tax, you must file Schedule SE (Form 1040) with your return. 1040ez tax file   If you filed Form 4361 and did not receive approval from the IRS, you must pay SE tax on your ministerial earnings, as explained earlier. 1040ez tax file You should report ministerial earnings and expenses from nonemployee ministerial services on Schedule C or C-EZ (Form 1040). 1040ez tax file You should then carry the net amount over to line 2 of Schedule SE (Form 1040), Section A or B. 1040ez tax file However, if you were a duly ordained minister who was an employee of a church and you must pay SE tax on the wages you earned for those services, do not report those wages on Schedule C or C-EZ (Form 1040). 1040ez tax file Instead, report those wages less any allowable expenses (including any unreimbursed employee business expenses), on line 2 of Schedule SE (Form 1040), Section A or B, and attach an explanation. 1040ez tax file Note. 1040ez tax file For income tax purposes, the unreimbursed employee business expenses that you incurred as an employee of the church and subtracted from your wages on line 2 of Schedule SE (Form 1040) are allowed only as an itemized deduction on Schedule A (Form 1040) if they exceed 2% of your adjusted gross income. 1040ez tax file You cannot deduct these expenses on Schedule C or C-EZ (Form 1040) as a trade or business expense. 1040ez tax file Exemption from SE tax. 1040ez tax file   If you filed Form 4361 and received IRS approval not to be taxed on your ministerial earnings, and you do not have any other income subject to SE tax, do not file Schedule SE (Form 1040). 1040ez tax file Instead, enter “Exempt—Form 4361” on the dotted line next to Form 1040, line 56. 1040ez tax file However, if you had net earnings from another trade or business of $400 or more subject to SE tax, see line A at the top of Schedule SE (Form 1040), Section B. 1040ez tax file    If you filed Form 4029 and received IRS approval not to be taxed on those earnings, and you do not have any other income subject to SE tax, do not file Schedule SE (Form 1040). 1040ez tax file Instead, enter “Exempt—Form 4029” on the dotted line next to Form 1040, line 56. 1040ez tax file More information. 1040ez tax file   For more information on filing your return, including when and where to file it, see the Instructions for Form 1040. 1040ez tax file Retirement Savings Arrangements Retirement savings arrangements are plans that offer you a tax-favored way to save for your retirement. 1040ez tax file You generally can deduct your contributions to the plan. 1040ez tax file Your contributions and the earnings on them are not taxed until they are distributed. 1040ez tax file Retirement plans for the self-employed. 1040ez tax file   To set up one of the following plans you must be self-employed. 1040ez tax file SEP (simplified employee pension) plan. 1040ez tax file SIMPLE (savings incentive match plan for employees) plan. 1040ez tax file Qualified retirement plan (also called a Keogh or H. 1040ez tax file R. 1040ez tax file 10 plan). 1040ez tax file   The common-law rules determine whether you are an employee or a self-employed person for purposes of setting up a retirement plan. 1040ez tax file See Employment status for other tax purposes under Coverage of Members of the Clergy, earlier. 1040ez tax file This result is true even if your compensation for ministerial services (defined earlier) is subject to SE tax. 1040ez tax file   For example, if a congregation pays you a salary for performing ministerial services and you are subject to the congregation's control, you generally are a common-law employee. 1040ez tax file You are not a self-employed person for purposes of setting up a retirement plan. 1040ez tax file This result is true even if your salary is subject to SE tax. 1040ez tax file   On the other hand, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal services that you report on Schedule C or C-EZ (Form 1040), are earnings from self-employment for all tax purposes. 1040ez tax file   For more information on establishing a SEP, SIMPLE, or qualified retirement plan, see Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans). 1040ez tax file Individual retirement arrangements (IRAs). 1040ez tax file   The traditional IRA and the Roth IRA are two individual retirement arrangements you can use to save money for your retirement. 1040ez tax file Generally, your maximum contribution for 2013 to either of these plans (or to a combination of the two) is the smaller of your taxable compensation or $5,500 ($6,500 if you are age 50 or older). 1040ez tax file   However, your maximum contribution to a Roth IRA will be further reduced or eliminated if your adjusted gross income is above a certain amount. 1040ez tax file You cannot deduct Roth IRA contributions, but if you satisfy certain requirements, all earnings in the Roth IRA are tax free and neither your nondeductible contributions nor any earnings on them are taxable when distributed. 1040ez tax file   If you contribute to a traditional IRA, your contribution may be deductible. 1040ez tax file However, your deduction may be reduced or eliminated if you or your spouse is covered by an employer retirement plan (including, but not limited to, a SEP, SIMPLE, or qualified retirement plan). 1040ez tax file   For more information on IRAs, see Publication 590. 1040ez tax file Tax-sheltered annuity plans. 1040ez tax file   Church employees, members of religious orders, and duly ordained, commissioned, or licensed ministers working as ministers or chaplains can participate in tax-sheltered annuity (403(b)) plans. 1040ez tax file For more