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2011 Tax Filing

Amend TaxE File 2012 Federal TaxesPrepare 1040x Online2010 Tax FilingWhere To File 1040ezEz40Tax Exemptions For Disabled VeteransEfile State Taxes FreeI Still Need To File My 2012 TaxesIrs 1040H And R Block Free Online Tax FilingHelp Me File 1040ez1040ez Form For 20132011 Tax Forms 1040Turbotax 1040x FormBlank Printable 1040ez FormHow To File Taxes While UnemployedMilitary Tax Refund Calculator2011taxesDo Tax AmendmentIrs 1040 Form1040 Ez IrsEz 40 Tax FormTaxes HrblockFree Prior Year Tax Filing FreeE File 2011 Taxes OnlineBack Taxes Help1040x Example2011 Tax Tables 1040ezAmendment For TaxesAmending 2012 Federal Tax ReturnIrs Form 1040 20111040ez Form BookletFile For Extension 2011 Taxes Free1040x Fillable Forms1040ez Worksheet Line 5Amend My 2011 TaxesFree State Tax HelpE File 2012 Tax ReturnFile A Tax Amendment

2011 Tax Filing

2011 tax filing Publication 575 - Introductory Material Table of Contents What's New Reminders IntroductionThe General Rule. 2011 tax filing Individual retirement arrangements (IRAs). 2011 tax filing Civil service retirement benefits. 2011 tax filing Social security and equivalent tier 1 railroad retirement benefits. 2011 tax filing Tax-sheltered annuity plans (403(b) plans). 2011 tax filing Ordering forms and publications. 2011 tax filing Tax questions. 2011 tax filing Useful Items - You may want to see: What's New For purposes of the net investment income tax (NIIT), net investment income does not include distributions from a qualified retirement plan (for example, 401(a), 403(a), 403(b), 408, 408A, or 457(b) plans). 2011 tax filing However, these distributions are taken into account when determining the modified adjusted gross income threshold. 2011 tax filing Distributions from a nonqualified retirement plan are included in net investment income. 2011 tax filing See Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts, and its instructions for more information. 2011 tax filing Reminders Future developments. 2011 tax filing  For the latest information about developments related to Publication 575, such as legislation enacted after it was published, go to www. 2011 tax filing irs. 2011 tax filing gov/pub575. 2011 tax filing In-plan Roth rollovers. 2011 tax filing   Starting in 2013, the American Taxpayer Relief Act of 2012 expanded the rules for in-plan Roth rollovers to include more taxpayers. 2011 tax filing For more information, see In-plan Roth rollovers under Rollovers, discussed later. 2011 tax filing Photographs of missing children. 2011 tax filing  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 2011 tax filing Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 2011 tax filing You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 2011 tax filing Introduction This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. 2011 tax filing How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity). 2011 tax filing What is covered in this publication?   This publication contains information that you need to understand the following topics. 2011 tax filing How to figure the tax-free part of periodic payments under a pension or annuity plan, including using a simple worksheet for payments under a qualified plan. 2011 tax filing How to figure the tax-free part of nonperiodic payments from qualified and nonqualified plans, and how to use the optional methods to figure the tax on lump-sum distributions from pension, stock bonus, and profit-sharing plans. 2011 tax filing How to roll over certain distributions from a retirement plan into another retirement plan or IRA. 2011 tax filing How to report disability payments, and how beneficiaries and survivors of employees and retirees must report benefits paid to them. 2011 tax filing How to report railroad retirement benefits. 2011 tax filing When additional taxes on certain distributions may apply (including the tax on early distributions and the tax on excess accumulation). 2011 tax filing For additional information on how to report pension or annuity payments on your federal income tax return, be sure to review the instructions on the back of Copies B, C, and 2 of the Form 1099-R that you received and the instructions for Form 1040, lines 16a and 16b (Form 1040A, lines 12a and 12b or Form 1040NR, lines 17a and 17b). 2011 tax filing A “corrected” Form 1099-R replaces the corresponding original Form 1099-R if the original Form 1099-R contained an error. 2011 tax filing Make sure you use the amounts shown on the corrected Form 1099-R when reporting information on your tax return. 2011 tax filing What is not covered in this publication?   The following topics are not discussed in this publication. 2011 tax filing The General Rule. 2011 tax filing   This is the method generally used to determine the tax treatment of pension and annuity income from nonqualified plans (including commercial annuities). 2011 tax filing For a qualified plan, you generally cannot use the General Rule unless your annuity starting date is before November 19, 1996. 2011 tax filing Although this publication will help you determine whether you can use the General Rule, it will not help you use it to determine the tax treatment of your pension or annuity income. 2011 tax filing For that and other information on the General Rule, see Publication 939, General Rule for Pensions and Annuities. 2011 tax filing Individual retirement arrangements (IRAs). 2011 tax filing   Information on the tax treatment of amounts you receive from an IRA is in Publication 590, Individual Retirement Arrangements (IRAs). 2011 tax filing Civil service retirement benefits. 2011 tax filing   If you are retired from the federal government (regular, phased, or disability retirement) or are the survivor or beneficiary of a federal employee or retiree who died, get Publication 721, Tax Guide to U. 2011 tax filing S. 2011 tax filing Civil Service Retirement Benefits. 2011 tax filing Publication 721 covers the tax treatment of federal retirement benefits, primarily those paid under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS). 2011 tax filing It also covers benefits paid from the Thrift Savings Plan (TSP). 2011 tax filing Social security and equivalent tier 1 railroad retirement benefits. 2011 tax filing   For information about the tax treatment of these benefits, see Publication 915, Social Security and Equivalent Railroad Retirement Benefits. 2011 tax filing However, this publication (575) covers the tax treatment of the non-social security equivalent benefit portion of tier 1 railroad retirement benefits, tier 2 benefits, vested dual benefits, and supplemental annuity benefits paid by the U. 2011 tax filing S. 2011 tax filing Railroad Retirement Board. 2011 tax filing Tax-sheltered annuity plans (403(b) plans). 2011 tax filing   If you work for a public school or certain tax-exempt organizations, you may be eligible to participate in a 403(b) retirement plan offered by your employer. 2011 tax filing Although this publication covers the treatment of benefits under 403(b) plans and discusses in-plan Roth rollovers from 403(b) plans to designated Roth accounts, it does not cover other tax provisions that apply to these plans. 2011 tax filing For that and other information on 403(b) plans, see Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations. 2011 tax filing Comments and suggestions. 2011 tax filing   We welcome your comments about this publication and your suggestions for future editions. 2011 tax filing   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 2011 tax filing NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 2011 tax filing Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 2011 tax filing   You can send your comments from www. 2011 tax filing irs. 2011 tax filing gov/formspubs/. 2011 tax filing Click on “More Information” and then on “Comment on Tax Forms and Publications. 2011 tax filing ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 2011 tax filing Ordering forms and publications. 2011 tax filing   Visit www. 2011 tax filing irs. 2011 tax filing gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 2011 tax filing Internal Revenue Service 1201 N. 2011 tax filing Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 2011 tax filing   If you have a tax question, check the information available on IRS. 2011 tax filing gov or call 1-800-829-1040. 2011 tax filing We cannot answer tax questions sent to either of the above addresses. 2011 tax filing Useful Items - You may want to see: Publication 524 Credit for the Elderly or the Disabled 525 Taxable and Nontaxable Income 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 571 Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations 590 Individual Retirement Arrangements (IRAs) 721 Tax Guide to U. 2011 tax filing S. 2011 tax filing Civil Service Retirement Benefits 915 Social Security and Equivalent Railroad Retirement Benefits 939 General Rule for Pensions and Annuities Form (and Instructions) W-4P Withholding Certificate for Pension or Annuity Payments 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 2011 tax filing 4972 Tax on Lump-Sum Distributions 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts See How To Get Tax Help near the end of this publication for information about getting publications and forms. 2011 tax filing Prev  Up  Next   Home   More Online Publications
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The IRS conducts a PIA on information systems that collect personally identifiable information. Performing Privacy Impact Assessments ensures that:

  • the public is aware of the information we collect about them;
  • any impact these systems have on personal privacy is adequately addressed; and,
  • we collect only enough personal information to administer our programs, and no more.

In addition, PIAs confirm that we use the information for the purpose intended; that the information remains timely and accurate; and that it is protected while we have it and that we hold it only for as long as we need it.

As indicated by "XXXXX" some of these documents are edited, or redacted. We have withheld information that, if released might harm our systems, compromise law enforcement efforts or, jeopardize competitive business interests.

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Full Title

Acronym

 
A
Accounts Management Service AMS

Alaska Permanent Fund Dividend

AKPFD
Appeals Centralized Database System ACDS
Appeals Customer Service ACuServ
Appeals Customer Satisfaction Survey ACSS
Audit Information Management System Reference AIMS-R
Audit Information Management System Related Reports AIMS-RR
Automated Collection System ACS

Automated Computational Tool

ACT

AIMS Computer Information System

A-CIS

Automated Electronic Fingerprinting

AEF
Automated Freedom of Information Act AFOIA

Automated Insolvency System

AIS

Automated Lien System

ALS-Entity

Automated Manual Assessments AMA
Automated Non Master File ANMF
Automated Offer In Compromise

AOIC

Automated Quarterly Excise Tax Listing, Milestone 4B AQETL
Automated Substitute for Returns (ASFR) System ASFR

Automated Substitute for Return A6020(b)

A6020-B
Automated Trust Fund Recovery Application ATFR
Automated Under Reporter AUR

Automated Under Reporter Inv. Strategy Database

AURISD

B
Bank Discrepancy Application  
Bank Secrecy Act Dun & Bradstreet Project and Automated Internet Research Process BSA-D&B AIRP
Big Data Analytics BDA
Bulkdata Electronic File Transfer System BEFT
Business Master File BMF
Business Master File Document Specific BDOCSPEC
Business Master File Case Creation Nonfiler Indentification Process BMF CCNIP
Business Master File-Individual Master File Notices Milestone 4B BMFIMMFNOT
Business Master File On-Line/Employee Plans Master File On-Line BMFOL/EMFOL
Business Objects Enterprise BOE
C

Certified Transcripts

CERTS

CFO/ARDI Audit Management System  
Chapter Three Withholding CTW
Chief Counsel System Domain CC-1
Combined Annual Wage Reporting CAWR
Compliance Data Environment, Release 3 CDEr3

Compliance Data Warehouse

CDW
Compliance Research Information System CRIS

Compliance Research Initiative Tracking System

CRITS
Contact Analytics CA
Contact Recording for Taxpayer Assistance Centers CR-TAC
Control Data Analysis CDA-PCD
Corporate Data Initiative CDI
Correspondence Examination Automation Support CEAS
Counsel Automated System Environment CASE
Counsel Litigation Support Project CLSP
CASE Management Information System CASE-MIS
CASE Tax Litigation – Counsel Automated Tracking System CASE-TLCATS
Criminal Investigation - 1 General Support System CI–1 GSS
Criminal Investigation – 2 General Support System CI-2 GSS

Criminal Investigation Management Information System, integrated with, Asset Forfeiture Tracking and Retrieval

CIMIS-AFTRAK

Custodial Audit Support Tracking System CASTS
Customer Account Data Engine CADE2
Customer Account Data Engine 2 - Database CADE - 2 DB
Customer Self Service Voice Response Unit CSS-VRU
 
D

Department of Labor Standards Enforcement

DLSE
Dependent Data Base DDb
Dun & Bradstreet Full Service Restaurants Database DB FSRDB
 
E
eAuthentication3 eAuth
e-Services, Release 3.0, Version 1.0  
eBay/PayPal Law Enforcement eRequest System LERS
Elections by Foreign Corporations  
Electronic Disclosure Information Management System
Electronic Faxic Fax
EDIMS
Electronic Faxic Fax e-FAX

Electronic Federal Payment Posting System

EFPPS
Electronic Filing of 94xXML Returns 94xXML

Electronic Filing System

ELF-R
Electronic Filing Automated Report System EARS

Electronic Fraud Detection System

EFDS
Electronic Installment Agreement eIA

Electronic Management System

EMS

Electronic MFTRA

E-MFTRA

Electronic Tax Administration Marketing Database

ETA-MDB
Electronic Tax Administration Research & Analysis System ETARAS
Electronic Tax Law Assistance System ETLA
Embedded Quality Review System EQRS
Embedded Quality Review System – Campus EQRS-C
Embedded Quality Review System Field EQRS-F
Employee Plans Audit Information Management System DPTE
Employee Plans/Exempt Organizations/Government Entities Audit Information Management System Report Processing System EARP

Employee Plans Master File

EPMF

Employee Protection System EPS
Enforcement Revenue Information System ERIS
Employee Plans/Exempt Organizations Determination System EDS
Enterprise Forensics & eDiscovery EnCase
Enterprise Informatica Platform EIP
e-Postcard Public Disclosure Application  
e-Trak Civil Rights Division e-Track CRD

e-Trak Communications and Correspondence System Module

e-Trak C&C
e-Trak Non-Resident Filing e-Trak NRF
e-Trak Veterans Employment Tracking System e-Trak VETS
e-Trak Voluntary Disclosure Program e-Trak VDP
e-Trak Whistleblower Office e-Trak WO

Error Resolution System

ERS
Estate/Inheritance and Gift Non-Filer and Underreporter EGNFUR
Examination Desktop Support System EDSS
Examination Operational Automation Database EOAD

Examination Returns Control System

ERCS

Excise Files Information Retrieval System ExFIRS
Exempt Organization Entity EOE
Exempt Organizations Extracts EXEMPTORG

Excise Files Information Retrieval System

ExFIRS

Exempt Orgs & Govt Entities Audit System DEXP
 
F
Facebook: IRS Recruitment Page  
Facilitated Self-Assistance Research Project FSRP
Federal Student Aid – Datashare FSA-D

Federal Tax Deposit

FTD
Federal Payment Levy Program FPLP
Federal/State Fed/State
Federal Unemployment Tax Act FUTA

Filing Information Returns Electronically

FIRE

Financial Management Information System FMIS
Foreign Account Tax Compliance Act – Foreign Finance Institution Registration FATCA–FFIR
Fraud Inventory Management System FIMS
Fresh Start – Failure to Pay Penalty Relief, FTP Penalty Relief FTP
 
G

Generalized Mainline Framework

GMF
Generalized Unpostable Framework GUF
Global High Wealth Industry Workload Services Database GHW
Grant Solutions GS
 
H
Headquarters Employee Plans Inventory Control HQEP

Health Coverage Tax Credit

HCTC

HQEO System HQEO
 
I
Individual Master File IMF
Individual Taxpayer Burden Surveys ITBS
Individual Taxpayer Identification Number Real-Time System ITIN-RTS
Informant Claims Examination ICE
Information Reporting and Document Matching IRDM
Information Return Master File IRMF
Information Returns Processing IRP
Information Returns Processing Paper Documents IRPPD
Integrated Collection System ICS

Integrated Data Retrieval System

IDRS

Integrated Financial System IFS
Integrated Production Model IPM

Integrated Submission and Remittance Processing System

ISRP

Intelligent Business Solutions Advanced Research Lab (IBS ARL)

IBS-ARL

International Passport Program Office

IPOP

International National Standard Application

INTL-NSA
Inventory Delivery System IDS

Investigative Scanning & Document Management

ISDM

IRS.gov Public Website

 
IRS2Go IRS2Go

Issue Based Management Information System

IBMIS

Issue Management System Integration IMSI
 
J  
Joint Operations Center National Data Center JOC-NDC
 
K
 
L
Letter & Information Network User-fee System LINUS
Link & Learn Taxes Automated Certification Tracking  
LMSB Decision Support & Data Capture System LMSB DCS
Large and Midsize Business 1446–6 International Database LMSB 1446-6
LMSB Workload Identification System LWIS
Low Income Taxpayer Clinic LITC
 
M
Mail Labels and Media Support MLMS
Making Work Pay MPW

Management Information System Data Warehouse

MISDW

Microfilm Replacement System MRS
Minister Waivers Min Waiv
Modernized e-File MeF
Modernized e-File Application Excise Tax for e-File MeF-ETEC
Modernized Enterprise Data Reporting MEDR
Modernized Internet Employer Identification Number Mod IEIN
Modified EP/EO Determination System MEDS
 
N
National Account Profile NAP

National Research Program

NRP

Nationwide Tax Forums Customer Satisfaction Surveys Database NTF-CSSD
Nationwide Tax Forum Online Feedback Form NTFO
Notice Conversion NC
Notice Delivery System NDS
Notice Prints Processing (NPP) CY 2012, Release/Milestone 4B NPP
Notice Review Processing System NRPS
 
O
Office of Tax Shelter Analysis Database OTSA

Offshore Credit Card Program

OCCP

On-Line Notice Review OLNR
Online Payment Agreement OPA
 
P
Payer Master File PMF
Payment Tracer PT
Photocopy Refunds Program PHOREF
Political Action Committee/Political Organization Filing and Disclosure PAC527/POFD
Public Information Officers Database PioNeer
 

Q

 

Qualifying Therapeutic Discovery Grant/Credit Program Project

QTDG/CPP
 
R
Recruitment Tracking System R-TRAK
Remittance Processing System RPS

Remittance Processing System - Pre-Mainline

RPS-PM
Remittance Strategy for Paper Check Conversion RS-PCC
Remittance Transaction Research RTR

Report Generation Software

RGS
Reporting Compliance Case Management System RCCMS
Return Preparer Database RPD
Return Review Program RRP
Return Review Program – Transition State RRP
Returns Inventory and Classification System-Compliance Decision Analytics RICS-CDA
Returns Inventory & Classification System RICS

Risk Based Scoring System Version 2.0

RBSS
 
S

Selection and Workload Classification Component

SWC-C1

Service Center Recognition Image Processing System

SCRIPS
Short Term Transcript ST-TRA
SPEC Total Relationship Management SPECTRM
Specialist Referral System SRS-2

SS-8 Integrated Case Processing System

SS8ICP
Standard IDRS Access Tier II SIA
Standard Corporate Files On-Line (CFOL) Access Protocol SCAP
State Income Tax Levy Program SITLP
Statistics of Income Distributed Processing System SOI-DPS
System Advocacy Management System, Release II SAMS-II
 
T
Tax Exempt/Exempt Government Entities Rulings and Agreements Control TRAC
Tax Forms & Pubs Oracle Program Tracking System TFPOPTS
Tax Return Database TRDB
Taxpayer Advocate Service Customer Survey  
Taxpayer Advocate Service Integrated System TASIS
Taxpayer Advocate Service Management Information System TAMIS
Tax Professional Preparer Tax Identification Number System PTIN-TPPS
Third Party Contact TPC
Title 31 Non-Banking Financial Institution Database  
 
U
U.S. Residency Certification US-CERT
 
V
 
W

Web-Based Employee Technical Time System

WebETS
Web Currency & Banking Retrieval System WebCBRS
Where's My Refund WMR
Withholding Compliance System   WHCS
   
Y  

YK1 Readiness

 

YK1

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IRS Headquarters Disclosure Office
OS:P:GLD:D
1111 Constitution Avenue, N.W .
Washington, DC 20224

For questions regarding the Privacy Impact Assessment process at the IRS:

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Internal Revenue Service
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Page Last Reviewed or Updated: 24-Mar-2014

The 2011 Tax Filing

2011 tax filing Publication 517 - Main Content Table of Contents Social Security CoverageCoverage of Members of the Clergy Coverage of Religious Workers (Church Employees) U. 2011 tax filing S. 2011 tax filing 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. 2011 tax filing Full-time student. 2011 tax filing Adjusted gross income. 2011 tax filing More information. 2011 tax filing 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). 2011 tax filing 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. 2011 tax filing Your earnings for these ministerial services (defined later) are subject to self-employment (SE) tax unless one of the following applies. 2011 tax filing You are a member of a religious order who has taken a vow of poverty. 2011 tax filing You ask the Internal Revenue Service (IRS) for an exemption from SE tax for your services and the IRS approves your request. 2011 tax filing See Exemption From Self-Employment (SE) Tax , later. 2011 tax filing 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. 2011 tax filing For more information, see Bilateral Social Security (Totalization) Agreements in Publication 54. 2011 tax filing 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. 2011 tax filing See Ministerial Services , later. 2011 tax filing 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. 2011 tax filing However, you can request that the IRS grant you an exemption, as discussed under Exemption From Self-Employment (SE) Tax , later. 2011 tax filing For the specific services covered, see Ministerial Services , later. 2011 tax filing Ministers defined. 2011 tax filing   Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. 2011 tax filing 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. 2011 tax filing   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. 2011 tax filing Employment status for other tax purposes. 2011 tax filing   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. 2011 tax filing For income tax or retirement plan purposes, your income earned as an employee will be considered wages. 2011 tax filing Common-law employee. 2011 tax filing   Under common-law rules, you are considered either an employee or a self-employed person. 2011 tax filing 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. 2011 tax filing For more information about the common-law rules, see Publication 15-A, Employer's Supplemental Tax Guide. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing Example. 2011 tax filing A church hires and pays you a salary to perform ministerial services subject to its control. 2011 tax filing Under the common-law rules, you are an employee of the church while performing those services. 2011 tax filing Form SS-8. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing See Ministerial Services , later. 2011 tax filing However, you can request that the IRS grant you an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 2011 tax filing Vow of poverty. 2011 tax filing   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. 2011 tax filing You do not need to request a separate exemption. 2011 tax filing For income tax purposes, the earnings are tax free to you. 2011 tax filing Your earnings are considered the income of the religious order. 2011 tax filing Services covered under FICA at the election of the order. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing   The order or subdivision elects coverage by filing Form SS-16. 2011 tax filing 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. 2011 tax filing If the election is made, the order or subdivision pays both the employer's and employee's share of the tax. 2011 tax filing You do not pay any of the FICA tax. 2011 tax filing Services performed outside the order. 2011 tax filing   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. 2011 tax filing   In these cases, your income from self-employment or as an employee of that outside organization is taxable to you directly. 2011 tax filing You may, however, be able to take a charitable deduction for the amount you turn over to the order. 2011 tax filing See Publication 526, Charitable Contributions. 2011 tax filing Rulings. 2011 tax filing   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. 2011 tax filing To request a ruling, follow the procedures in Revenue Procedure 2014-1, 2014-1 I. 2011 tax filing R. 2011 tax filing B. 2011 tax filing 1, available at www. 2011 tax filing irs. 2011 tax filing gov/irb/2014-1_IRB/ar05. 2011 tax filing html. 2011 tax filing 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. 2011 tax filing However, you can request an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 2011 tax filing Practitioners. 2011 tax filing   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. 2011 tax filing State law specifically exempts Christian Science practitioners from licensing requirements. 2011 tax filing   Some Christian Science practitioners also are Christian Science teachers or lecturers. 2011 tax filing Income from teaching or lecturing is considered the same as income from their work as practitioners. 2011 tax filing Readers. 2011 tax filing   For tax purposes, Christian Science readers are considered the same as ordained, commissioned, or licensed ministers. 2011 tax filing 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. 2011 tax filing Some exceptions are discussed next. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Instead, your wages are subject to SECA and you must pay SE tax on your wages if they exceed $108. 2011 tax filing 28 during the tax year. 2011 tax filing However, you can request an exemption from SE tax if you are a member of a recognized religious sect, as discussed below. 2011 tax filing Churches and church organizations make this election by filing two copies of Form 8274. 2011 tax filing For more information about making this election, see Form 8274. 2011 tax filing 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. 2011 tax filing This exemption does not apply to your service, if any, as a minister of a church or as a member of a religious order. 2011 tax filing Make this choice by filing Form 4029. 2011 tax filing See Requesting Exemption—Form 4029 , later, under Members of Recognized Religious Sects. 2011 tax filing U. 2011 tax filing S. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing S. 2011 tax filing social security system. 2011 tax filing To determine your alien status, see Publication 519, U. 2011 tax filing S. 2011 tax filing Tax Guide for Aliens. 2011 tax filing Residents of Puerto Rico, the U. 2011 tax filing S. 2011 tax filing Virgin Islands, Guam, the CNMI, and American Samoa. 2011 tax filing   If you are a resident of one of these U. 2011 tax filing S. 2011 tax filing possessions but not a U. 2011 tax filing S. 2011 tax filing citizen, for SE tax purposes you are treated the same as a citizen or resident alien of the United States. 2011 tax filing For information on figuring the tax, see Self-Employment Tax: Figuring Net Earnings , later. 2011 tax filing 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. 2011 tax filing Income you receive for performing ministerial services is subject to SE tax unless you have an exemption as explained later. 2011 tax filing Even if you have an exemption, only the income you receive for performing ministerial services is exempt. 2011 tax filing The exemption does not apply to any other income. 2011 tax filing The following discussions provide more detailed information on ministerial services of ministers, members of a religious order, and Christian Science practitioners and readers. 2011 tax filing Ministers Most services you perform as a minister, priest, rabbi, etc. 2011 tax filing , are ministerial services. 2011 tax filing 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. 2011 tax filing You are considered to control, conduct, and maintain a religious organization if you direct, manage, or promote the organization's activities. 2011 tax filing 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. 2011 tax filing Services for nonreligious organizations. 2011 tax filing   Your services for a nonreligious organization are ministerial services if the services are assigned or designated by your church. 2011 tax filing Assigned or designated services qualify even if they do not involve performing sacerdotal functions or conducting religious worship. 2011 tax filing   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. 2011 tax filing Services that are not part of your ministry. 2011 tax filing   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. 2011 tax filing The following are not ministerial services. 2011 tax filing Services you perform for nonreligious organizations other than the services stated above. 2011 tax filing 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. 2011 tax filing These services are not ministerial services even if you are performing sacerdotal functions or conducting religious worship. 2011 tax filing (For example, if you perform services as a chaplain in the Armed Forces of the United States, those services are not ministerial services. 2011 tax filing ) Services you perform in a government-owned and operated hospital. 2011 tax filing (These services are considered performed by a government employee, not by a minister as part of the ministry. 2011 tax filing ) 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. 2011 tax filing Books or articles. 2011 tax filing   Writing religious books or articles is considered to be in the exercise of your ministry and is considered a ministerial service. 2011 tax filing   This rule also applies to members of religious orders and to Christian Science practitioners and readers. 2011 tax filing 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. 2011 tax filing The services are considered ministerial because you perform them as an agent of the order. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Effect of employee status. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing This result is true even if you have taken a vow of poverty. 2011 tax filing Example. 2011 tax filing Pat Brown and Chris Green are members of a religious order and have taken vows of poverty. 2011 tax filing They renounce all claims to their earnings. 2011 tax filing The earnings belong to the order. 2011 tax filing Pat is a licensed attorney. 2011 tax filing The superiors of the order instructed her to get a job with a law firm. 2011 tax filing Pat joined a law firm as an employee and, as she requested, the firm made the salary payments directly to the order. 2011 tax filing Chris is a secretary. 2011 tax filing The superiors of the order instructed him to accept a job with the business office of the church that supervises the order. 2011 tax filing Chris took the job and gave all his earnings to the order. 2011 tax filing Pat's services are not duties required by the order. 2011 tax filing Her earnings are subject to social security and Medicare tax under FICA and to federal income tax. 2011 tax filing Chris' services are duties required by the order. 2011 tax filing He is acting as an agent of the order and not as an employee of a third party. 2011 tax filing 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. 2011 tax filing Christian Science Practitioners and Readers Services you perform as a Christian Science practitioner or reader in the exercise of your profession are ministerial services. 2011 tax filing Amounts you receive for performing these services are generally subject to SE tax. 2011 tax filing You may request an exemption from SE tax, discussed next, which applies only to those services. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing They do not have to request the exemption. 2011 tax filing Who cannot be exempt. 2011 tax filing   You cannot be exempt from SE tax if you made one of the following elections to be covered under social security. 2011 tax filing These elections are irrevocable. 2011 tax filing 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. 2011 tax filing You elected before 1968 to be covered under social security for your ministerial services. 2011 tax filing Requesting exemption. 2011 tax filing    Table 2, earlier, briefly summarizes the procedure for requesting exemption from the SE tax. 2011 tax filing More detailed explanations follow. 2011 tax filing 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. 2011 tax filing It does not apply to any other self-employment income. 2011 tax filing Table 2. 2011 tax filing 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. 2011 tax filing You file Form 4361, described below under Requesting Exemption—Form 4361 . 2011 tax filing 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. 2011 tax filing You file for other than economic reasons. 2011 tax filing 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). 2011 tax filing This requirement does not apply to Christian Science practitioners or readers. 2011 tax filing You establish that the organization that ordained, commissioned, or licensed you, or your religious order, is a tax-exempt religious organization. 2011 tax filing You establish that the organization is a church or a convention or association of churches. 2011 tax filing You did not make an election discussed earlier under Who cannot be exempt . 2011 tax filing 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. 2011 tax filing Requesting Exemption—Form 4361 To request exemption from SE tax, file Form 4361 in triplicate (original and two copies) with the IRS. 2011 tax filing The IRS will return to you a copy of the Form 4361 that you filed indicating whether it has approved your exemption. 2011 tax filing If it is approved, keep the approved copy of Form 4361 in your permanent records. 2011 tax filing When to file. 2011 tax filing   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. 2011 tax filing You have net earnings from self-employment of at least $400. 2011 tax filing 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. 2011 tax filing The 2 years do not have to be consecutive tax years. 2011 tax filing    The approval process can take some time, so you should file Form 4361 as soon as possible. 2011 tax filing Example 1. 2011 tax filing Rev. 2011 tax filing Lawrence Jaeger, a clergyman ordained in 2013, has net self-employment earnings as a minister of $450 in 2013 and $500 in 2014. 2011 tax filing He must file his application for exemption by the due date, including extensions, for his 2014 income tax return. 2011 tax filing However, if Rev. 2011 tax filing Jaeger does not receive IRS approval for an exemption by April 15, 2015, his SE tax for 2014 is due by that date. 2011 tax filing Example 2. 2011 tax filing Rev. 2011 tax filing 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. 2011 tax filing She must file her application for exemption by the due date, including extensions, for her 2014 income tax return. 2011 tax filing 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. 2011 tax filing Example 3. 2011 tax filing In 2011, Rev. 2011 tax filing David Moss was ordained a minister and had $700 in net self-employment earnings as a minister. 2011 tax filing In 2012, he received $1,000 as a minister, but his related expenses were over $1,000. 2011 tax filing Therefore, he had no net self-employment earnings as a minister in 2012. 2011 tax filing Also in 2012, he opened a book store and had $8,000 in net self-employment earnings from the store. 2011 tax filing In 2013, he had net self-employment earnings of $1,500 as a minister and $10,000 net self-employment earnings from the store. 2011 tax filing Rev. 2011 tax filing 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. 2011 tax filing Thus, he must file his application for exemption by the due date, including extensions, for his 2013 income tax return. 2011 tax filing Death of individual. 2011 tax filing   The right to file an application for exemption ends with an individual's death. 2011 tax filing A surviving spouse, executor, or administrator cannot file an exemption application for a deceased clergy member. 2011 tax filing Effective date of exemption. 2011 tax filing   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. 2011 tax filing Once the exemption is approved, it is irrevocable. 2011 tax filing Example. 2011 tax filing Rev. 2011 tax filing Trudy Austin, ordained in 2010, had $400 or more in net self-employment earnings as a minister in both 2010 and 2013. 2011 tax filing She files an application for exemption on February 20, 2014. 2011 tax filing If an exemption is granted, it is effective for 2010 and the following years. 2011 tax filing Refunds of SE tax. 2011 tax filing   If, after receiving an approved Form 4361, you find that you overpaid SE tax, you can file a claim for refund on Form 1040X. 2011 tax filing 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. 2011 tax filing A return you filed, or tax you paid, before the due date is considered to have been filed or paid on the due date. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing Exception. 2011 tax filing   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. 2011 tax filing However, if you pay your benefits back, you may be considered for exemption. 2011 tax filing Contact your local Social Security Administration office to find out the amount you must pay back. 2011 tax filing Eligibility requirements. 2011 tax filing   To claim this exemption from SE tax, all the following requirements must be met. 2011 tax filing You must file Form 4029, discussed later under Requesting Exemption—Form 4029 . 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing The sect or division must complete part of the form. 2011 tax filing The IRS will return to you a copy of the Form 4029 that you filed indicating whether it has approved your exemption. 2011 tax filing If it is approved, keep the approved copy of Form 4029 in your permanent records. 2011 tax filing When to file. 2011 tax filing   You can file Form 4029 at any time. 2011 tax filing   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. 2011 tax filing See Effective date of exemption next for information on when the newly approved exemption would become effective. 2011 tax filing    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. 2011 tax filing Effective date of exemption. 2011 tax filing   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. 2011 tax filing (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. 2011 tax filing )   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. 2011 tax filing 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. 2011 tax filing The exemption will end for the tax year where you or your sect/division first fails to meet the eligibility requirements. 2011 tax filing Refunds of SE tax paid. 2011 tax filing    To get a refund of any SE tax you paid while the exemption was in effect, file Form 1040X. 2011 tax filing For information on filing this form, see Refunds of SE tax under Requesting Exemption—Form 4361, earlier. 2011 tax filing Exemption From FICA Taxes Generally, under FICA, the employer and the employee each pay half of the social security and Medicare tax. 2011 tax filing 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. 2011 tax filing A partnership in which each partner holds a religious exemption from social security and Medicare is an employer for this purpose. 2011 tax filing 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. 2011 tax filing Information for employers. 2011 tax filing   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. 2011 tax filing   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. 2011 tax filing Form W-2. 2011 tax filing   When preparing a Form W-2 for an employee with an approved Form 4029, enter “Form 4029” in box 14, “Other. 2011 tax filing ” Do not make any entries in boxes 3, 4, 5, or 6. 2011 tax filing Forms 941, 943, and 944. 2011 tax filing   If both you and your employee have received approved Forms 4029, do not include these exempt wages on the following forms. 2011 tax filing Instead, follow the instructions given below. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Effective date. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Regular method. 2011 tax filing Nonfarm optional method. 2011 tax filing You may find Worksheets 1 through 4 helpful in figuring your net earnings from self-employment. 2011 tax filing Blank worksheets are in the back of this publication, after the Comprehensive Example. 2011 tax filing Regular Method Most people use the regular method. 2011 tax filing 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. 2011 tax filing Then, subtract your allowable business deductions and multiply the difference by 92. 2011 tax filing 35% (. 2011 tax filing 9235). 2011 tax filing Use Schedule SE (Form 1040) to figure your net earnings and SE tax. 2011 tax filing 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. 2011 tax filing 35% (. 2011 tax filing 9235). 2011 tax filing Do not reduce your wages by any business deductions when making this computation. 2011 tax filing Use Schedule SE (Form 1040), Section B, to figure your net earnings and SE tax. 2011 tax filing 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. 2011 tax filing Amounts included in gross income. 2011 tax filing   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. 2011 tax filing , 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. 2011 tax filing This amount is also subject to income tax. 2011 tax filing   For the income tax treatment of items (2) and (4), see Income Tax: Income and Expenses , later. 2011 tax filing Example. 2011 tax filing Pastor Roger Adams receives an annual salary of $39,000 as a full-time minister. 2011 tax filing The $39,000 includes $5,000 that is designated as a rental allowance to pay utilities. 2011 tax filing His church owns a parsonage that has a fair rental value of $12,000 per year. 2011 tax filing The church gives Pastor Adams the use of the parsonage. 2011 tax filing He is not exempt from SE tax. 2011 tax filing He must include $51,000 ($39,000 plus $12,000) when figuring his net earnings for SE tax purposes. 2011 tax filing 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. 2011 tax filing Overseas duty. 2011 tax filing   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. 2011 tax filing S. 2011 tax filing citizen or resident alien serving abroad and living in a foreign country. 2011 tax filing   For information on excluding foreign earned income or the foreign housing amount, see Publication 54. 2011 tax filing Example. 2011 tax filing Diane Jones was the minister of a U. 2011 tax filing S. 2011 tax filing church in Mexico. 2011 tax filing She earned $35,000 in that position and was able to exclude it all for income tax purposes under the foreign earned income exclusion. 2011 tax filing The United States does not have a social security agreement with Mexico, so Mrs. 2011 tax filing Jones is subject to U. 2011 tax filing S. 2011 tax filing SE tax and must include $35,000 when figuring net earnings from self-employment. 2011 tax filing Specified U. 2011 tax filing S. 2011 tax filing possessions. 2011 tax filing    The exclusion from gross income for amounts derived from American Samoa or Puerto Rico does not apply in computing net earnings from self-employment. 2011 tax filing Also see Residents of Puerto Rico, the U. 2011 tax filing S. 2011 tax filing Virgin Islands, Guam, the CNMI, and American Samoa , earlier, under U. 2011 tax filing S. 2011 tax filing Citizens and Resident and Nonresident Aliens. 2011 tax filing Amounts not included in gross income. 2011 tax filing   Do not include the following amounts in gross income when figuring your net earnings from self-employment. 2011 tax filing Offerings that others made to the church. 2011 tax filing 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. 2011 tax filing Pension payments or retirement allowances you receive for your past ministerial services. 2011 tax filing The rental value of a parsonage or a parsonage allowance provided to you after you retire. 2011 tax filing Allowable deductions. 2011 tax filing   When figuring your net earnings from self-employment, deduct all your expenses related to your ministerial services performed as a self-employed person. 2011 tax filing These are ministerial expenses you incurred while working other than as a common-law employee of the church. 2011 tax filing They include expenses incurred in performing marriages and baptisms, and in delivering speeches. 2011 tax filing 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. 2011 tax filing   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 . 2011 tax filing 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. 2011 tax filing Do not complete Schedule C or C-EZ (Form 1040). 2011 tax filing 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. 2011 tax filing Employee reimbursement arrangements. 2011 tax filing   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. 2011 tax filing Ask your employer if you are not sure if it reimburses you using an accountable or a nonaccountable plan. 2011 tax filing Accountable plans. 2011 tax filing   To be an accountable plan, your employer's reimbursement arrangement must include all three of the following rules. 2011 tax filing 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. 2011 tax filing You must adequately account to your employer for these expenses within a reasonable period of time. 2011 tax filing You must return any excess reimbursement or allowance within a reasonable period of time. 2011 tax filing   The reimbursement is not reported on your Form W-2. 2011 tax filing Generally, if your expenses equal your reimbursement, you have no deduction. 2011 tax filing If your expenses are more than your reimbursement, you can deduct your excess expenses for SE tax and income tax purposes. 2011 tax filing Nonaccountable plan. 2011 tax filing   A nonaccountable plan is a reimbursement arrangement that does not meet all three of the rules listed under Accountable plans above. 2011 tax filing In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan. 2011 tax filing Excess reimbursements you fail to return to your employer. 2011 tax filing Reimbursement of nondeductible expenses related to your employer's business. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing   For more information on accountable and nonaccountable plans, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing The tax rate for the social security part is 12. 2011 tax filing 4%. 2011 tax filing In addition, all of your net earnings are subject to the Medicare (hospital insurance) part of the SE tax. 2011 tax filing This tax rate is 2. 2011 tax filing 9%. 2011 tax filing The combined self-employment tax rate is 15. 2011 tax filing 3%. 2011 tax filing Additional Medicare Tax. 2011 tax filing   Beginning in 2013, a 0. 2011 tax filing 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. 2011 tax filing Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 2011 tax filing A self-employment loss is not considered for purposes of this tax. 2011 tax filing RRTA compensation is separately compared to the threshold. 2011 tax filing For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 2011 tax filing Nonfarm Optional Method You may be able to use the nonfarm optional method for figuring your net earnings from self-employment. 2011 tax filing 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. 2011 tax filing You may use the nonfarm optional method if you meet all the following tests. 2011 tax filing You are self-employed on a regular basis. 2011 tax filing 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. 2011 tax filing The net earnings can be from either farm or nonfarm earnings or both. 2011 tax filing You have used this method less than 5 prior years. 2011 tax filing (There is a 5-year lifetime limit. 2011 tax filing ) The years do not have to be consecutive. 2011 tax filing Your net nonfarm profits were: Less than $5,024, and Less than 72. 2011 tax filing 189% of your gross nonfarm income. 2011 tax filing If you meet all three tests, use Table 3 to figure your net earnings from self-employment under the nonfarm optional method. 2011 tax filing Table 3. 2011 tax filing Figuring Nonfarm Net Earnings IF your gross nonfarm income is . 2011 tax filing . 2011 tax filing . 2011 tax filing THEN your net earnings are equal to . 2011 tax filing . 2011 tax filing . 2011 tax filing $6,960 or less Two-thirds of your gross nonfarm income. 2011 tax filing More than $6,960 $4,640. 2011 tax filing Actual net earnings. 2011 tax filing   Multiply your total earnings subject to SE tax by 92. 2011 tax filing 35% (. 2011 tax filing 9235) to get actual net earnings. 2011 tax filing Actual net earnings are equivalent to net earnings under the “Regular Method. 2011 tax filing ” More information. 2011 tax filing   For more information on the nonfarm optional method, see Publication 334, Tax Guide for Small Business, and the Schedule SE (Form 1040) instructions. 2011 tax filing 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. 2011 tax filing Note. 2011 tax filing For purposes of this section, references to members of the clergy are only to ministers or members of a religious order. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing , in addition to your salary. 2011 tax filing If the offering is made to the religious institution, it is not taxable to you. 2011 tax filing 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. 2011 tax filing However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. 2011 tax filing For more information, see Publication 526. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing This exclusion applies only for income tax purposes. 2011 tax filing It does not apply for SE tax purposes, as discussed earlier under Amounts included in gross income under Self-Employment Tax: Figuring Net Earnings. 2011 tax filing Designation requirement. 2011 tax filing   The church or organization that employs you must officially designate the payment as a housing allowance before it makes the payment. 2011 tax filing It must designate a definite amount. 2011 tax filing It cannot determine the amount of the housing allowance at a later date. 2011 tax filing 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. 2011 tax filing   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. 2011 tax filing The local congregation must officially designate the part of your salary that is a housing allowance. 2011 tax filing However, a resolution of a national church agency can designate your housing allowance if you are directly employed by the national agency. 2011 tax filing Rental allowances. 2011 tax filing   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. 2011 tax filing   The amount you exclude cannot be more than the fair rental value of the home, including furnishings, plus the cost of utilities. 2011 tax filing Fair rental value of parsonage. 2011 tax filing   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. 2011 tax filing However, the exclusion cannot be more than the reasonable pay for your services. 2011 tax filing If you pay for the utilities, you can exclude any allowance designated for utility costs, up to your actual cost. 2011 tax filing Example. 2011 tax filing Rev. 2011 tax filing Joanna Baker is a full-time minister. 2011 tax filing The church allows her to use a parsonage that has an annual fair rental value of $24,000. 2011 tax filing The church pays her an annual salary of $67,000, of which $7,500 is designated for utility costs. 2011 tax filing Her actual utility costs during the year were $7,000. 2011 tax filing For income tax purposes, Rev. 2011 tax filing Baker excludes $31,000 from gross income ($24,000 fair rental value of the parsonage plus $7,000 from the allowance for utility costs). 2011 tax filing She will report $60,000 ($59,500 salary plus $500 of unused utility allowance). 2011 tax filing Her income for SE tax purposes, however, is $91,000 ($67,000 salary + $24,000 fair rental value of the parsonage). 2011 tax filing Home ownership. 2011 tax filing   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. 2011 tax filing Excess rental allowance. 2011 tax filing   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. 2011 tax filing   Include in the total on Form 1040, line 7. 2011 tax filing On the dotted line next to line 7, enter “Excess allowance” and the amount. 2011 tax filing 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. 2011 tax filing However, you can only deduct these expenses as itemized deductions on Schedule A (Form 1040). 2011 tax filing Retired ministers. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing Teachers or administrators. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing    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. 2011 tax filing In Publication 525, see Faculty lodging in the discussion on meals and lodging under Fringe Benefits. 2011 tax filing   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. 2011 tax filing Theological students. 2011 tax filing   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. 2011 tax filing Traveling evangelists. 2011 tax filing   You can exclude a designated rental allowance from out-of-town churches if you meet all of the following requirements. 2011 tax filing You are an ordained minister. 2011 tax filing You perform ministerial services at churches located away from your community. 2011 tax filing You actually use the rental allowance to maintain your permanent home. 2011 tax filing Cantors. 2011 tax filing   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. 2011 tax filing 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. 2011 tax filing See Members of Religious Orders , earlier, under Social Security Coverage. 2011 tax filing Foreign Earned Income Certain income may be exempt from income tax if you work in a foreign country or in a specified U. 2011 tax filing S. 2011 tax filing possession. 2011 tax filing Publication 54 discusses the foreign earned income exclusion. 2011 tax filing Publication 570, Tax Guide for Individuals With Income From U. 2011 tax filing S. 2011 tax filing Possessions, covers the rules for taxpayers with income from U. 2011 tax filing S. 2011 tax filing possessions. 2011 tax filing You can get these free publications from the Internal Revenue Service at IRS. 2011 tax filing gov or from most U. 2011 tax filing S. 2011 tax filing Embassies or consulates. 2011 tax filing Expense Items The tax treatment of ministerial trade or business expenses, expenses allocable to tax-free income, and health insurance costs is discussed here. 2011 tax filing 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. 2011 tax filing You also may have to file Form 2106, Employee Business Expenses (or Form 2106-EZ, Unreimbursed Employee Business Expenses). 2011 tax filing You claim these expenses as miscellaneous itemized deductions that are subject to the 2%-of-adjusted-gross-income (AGI) limit. 2011 tax filing See Publication 529 for more information on this limit. 2011 tax filing However, you cannot deduct any of your employee business expenses that are allocable to tax-free income (discussed next). 2011 tax filing 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. 2011 tax filing You cannot deduct the portion of your expenses that you allocate to your tax-free rental or parsonage allowance. 2011 tax filing Exception. 2011 tax filing   This rule does not apply to your deductions for home mortgage interest or real estate taxes on your home. 2011 tax filing Figuring the allocation. 2011 tax filing   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. 2011 tax filing    Reduce your otherwise deductible expenses only in figuring your income tax, not your SE tax. 2011 tax filing Example. 2011 tax filing Rev. 2011 tax filing 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. 2011 tax filing He incurred $4,000 of unreimbursed expenses connected with his earnings for ministerial services. 2011 tax filing $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. 2011 tax filing Rev. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing   If you receive a tax-free rental or parsonage allowance and have ministerial expenses, attach a statement to your tax return. 2011 tax filing The statement must contain all of the following information. 2011 tax filing A list of each item of taxable ministerial income by source (such as wages, salary, weddings, baptisms, etc. 2011 tax filing ) plus the amount. 2011 tax filing A list of each item of tax-free ministerial income by source (parsonage allowance) plus the amount. 2011 tax filing A list of each item of otherwise deductible ministerial expenses plus the amount. 2011 tax filing How you figured the nondeductible part of your otherwise deductible expenses. 2011 tax filing A statement that the other deductions claimed on your tax return are not allocable to your tax-free income. 2011 tax filing   See the attachments prepared for the Comprehensive Example , later. 2011 tax filing Following the example, you will find blank worksheets for your own use. 2011 tax filing 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. 2011 tax filing If you qualify, you can take this deduction as an adjustment to income on Form 1040, line 29. 2011 tax filing See the Instructions for Form 1040 to figure your deduction. 2011 tax filing The following special rules apply to the self-employed health insurance deduction. 2011 tax filing 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. 2011 tax filing You cannot take the deduction for any month you are eligible to participate in a subsidized plan of your (or your spouse's) employer. 2011 tax filing The deduction cannot exceed your net earnings from the business under which the insurance plan is established. 2011 tax filing Your net earnings under this rule do not include the income you earned as a common-law employee (discussed earlier) of a church. 2011 tax filing More information. 2011 tax filing   For more information about the self-employed health insurance deduction, see chapter 6 in Publication 535. 2011 tax filing Deduction for SE Tax You can deduct one-half of your SE tax in figuring adjusted gross income. 2011 tax filing This is an income tax deduction only, on Form 1040, line 27. 2011 tax filing Do not claim this deduction in figuring net earnings from self-employment subject to SE tax. 2011 tax filing Income Tax Withholding and Estimated Tax The federal income tax is a pay-as-you-go tax. 2011 tax filing You must pay the tax as you earn or receive income during the year. 2011 tax filing An employee usually has income tax withheld from his or her wages or salary. 2011 tax filing However, your salary is not subject to federal income tax withholding if both of the following conditions apply. 2011 tax filing 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. 2011 tax filing Your salary is for ministerial services (see Ministerial Services , earlier). 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Determine your estimated tax by using the worksheets in Publication 505, Tax Withholding and Estimated Tax. 2011 tax filing Pay the entire estimated tax for 2014 or the first installment by April 15, 2014. 2011 tax filing See Form 1040-ES for the different payment methods. 2011 tax filing The April 15 date applies whether or not your tax home and your abode are outside the United States and Puerto Rico. 2011 tax filing For more information, see chapter 2 of Publication 505. 2011 tax filing 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. 2011 tax filing 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. 2011 tax filing Table 4. 2011 tax filing 2013 Filing Requirements for Most Taxpayers IF your filing status is . 2011 tax filing . 2011 tax filing . 2011 tax filing AND at the end of 2013 you were* . 2011 tax filing . 2011 tax filing . 2011 tax filing THEN file a return if your gross income** was at least . 2011 tax filing . 2011 tax filing . 2011 tax filing 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. 2011 tax filing ** 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). 2011 tax filing 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). 2011 tax filing 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. 2011 tax filing Gross income includes gains, but not losses, reported on Form 8949 or Schedule D (Form 1040). 2011 tax filing Gross income from a business means, for example, the amount on Schedule C (Form 1040), line 7, or Schedule F (Form 1040), line 9. 2011 tax filing 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. 2011 tax filing *** 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. 2011 tax filing Additional requirements. 2011 tax filing   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. 2011 tax filing 28 or more from an electing church or church-controlled organization (see Coverage of Religious Workers (Church Employees) , earlier, under Social Security Coverage). 2011 tax filing Self-employment tax. 2011 tax filing   If you are liable for SE tax, you must file Schedule SE (Form 1040) with your return. 2011 tax filing   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. 2011 tax filing You should report ministerial earnings and expenses from nonemployee ministerial services on Schedule C or C-EZ (Form 1040). 2011 tax filing You should then carry the net amount over to line 2 of Schedule SE (Form 1040), Section A or B. 2011 tax filing 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). 2011 tax filing 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. 2011 tax filing Note. 2011 tax filing 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. 2011 tax filing You cannot deduct these expenses on Schedule C or C-EZ (Form 1040) as a trade or business expense. 2011 tax filing Exemption from SE tax. 2011 tax filing   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). 2011 tax filing Instead, enter “Exempt—Form 4361” on the dotted line next to Form 1040, line 56. 2011 tax filing 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. 2011 tax filing    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). 2011 tax filing Instead, enter “Exempt—Form 4029” on the dotted line next to Form 1040, line 56. 2011 tax filing More information. 2011 tax filing   For more information on filing your return, including when and where to file it, see the Instructions for Form 1040. 2011 tax filing Retirement Savings Arrangements Retirement savings arrangements are plans that offer you a tax-favored way to save for your retirement. 2011 tax filing You generally can deduct your contributions to the plan. 2011 tax filing Your contributions and the earnings on them are not taxed until they are distributed. 2011 tax filing Retirement plans for the self-employed. 2011 tax filing   To set up one of the following plans you must be self-employed. 2011 tax filing SEP (simplified employee pension) plan. 2011 tax filing SIMPLE (savings incentive match plan for employees) plan. 2011 tax filing Qualified retirement plan (also called a Keogh or H. 2011 tax filing R. 2011 tax filing 10 plan). 2011 tax filing   The common-law rules determine whether you are an employee or a self-employed person for purposes of setting up a retirement plan. 2011 tax filing See Employment status for other tax purposes under Coverage of Members of the Clergy, earlier. 2011 tax filing This result is true even if your compensation for ministerial services (defined earlier) is subject to SE tax. 2011 tax filing   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. 2011 tax filing You are not a self-employed person for purposes of setting up a retirement plan. 2011 tax filing This result is true even if your salary is subject to SE tax. 2011 tax filing   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. 2011 tax filing   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). 2011 tax filing Individual retirement arrangements (IRAs). 2011 tax filing   The traditional IRA and the Roth IRA are two individual retirement arrangements you can use to save money for your retirement. 2011 tax filing 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). 2011 tax filing   However, your maximum contribution to a Roth IRA will be further reduced or eliminated if your adjusted gross income is above a certain amount. 2011 tax filing 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. 2011 tax filing   If you contribute to a traditional IRA, your contribution may be deductible. 2011 tax filing 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). 2011 tax filing   For more information on IRAs, see Publication 590. 2011 tax filing Tax-sheltered annuity plans. 2011 tax filing   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. 2011 tax filing For more