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Amend Tax Return

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Amend Tax Return

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

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Alexandria

3508 Government Street
Alexandria, LA. 71302

Monday -Friday - 8:30 a.m.-4:30 p.m. 
(Closed for lunch 12:00 noon- 1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(318) 445-8028 

Alexandria/remote
Taxpayer Assistance
available at New Horizon
3717 Government Street
Alexandria, LA 71302

Monday-Friday - 8:30 a.m.-3:30 p.m.

 

Virtual Services Provided

(318) 445-8028
Baton Rouge 

2600 Citiplace Centre
Baton Rouge, LA. 70808 

Monday-Friday - 8:30 a.m.-4:30 p.m. 

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**
 

Services Provided

(225) 343-8625 

Houma 

423 Lafayette St.
Houma, LA 70360 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(985) 876-0949 

Lafayette  4021-A Ambassador
Caffery Parkway
Lafayette, LA 70503 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.) 

 

Services Provided

(337) 269-4036 

Lake Charles 

One Lake Shore Drive
Lake Charles, LA 70629
 
 

Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m.-1:30 p.m.) 

 

Services Provided

(337) 433-1362 

Monroe 

1401 Hudson Ln.
Monroe, LA 71201 

Monday -  Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(318) 322-6785

New Orleans 

1555 Poydras Street
New Orleans, LA 70112 

Monday - Friday - 8:30 a.m. - 4:30p.m 

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(504) 558-3344 

Shreveport 

3007 Knight St.
Shreveport, LA 71105 

Monday-Friday - 8:30 a.m.-4:30 p.m.
 

Services Provided

(318) 869-6310 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

The Taxpayer Advocate Service: Call (504)558- 3001 in New Orleans or 1-877-777-4778 elsewhere, or see  Publication 1546, The Taxpayer Advocate Service of the 0399 IRS.

For further information, see Tax Topic 104

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
1555 Poydras St., 
Attn: SPEC, Suite 220, Stop 5
New Orleans, LA 70112-3747

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Amend Tax Return

Amend tax return 31. Amend tax return   Tax on Unearned Income of Certain Children Table of Contents What's New Introduction Useful Items - You may want to see: Which Parent's Return To UseParents Who Do Not File a Joint Return Parent's Election To Report Child's Interest and DividendsEffect of Making the Election Figuring Child's Income Figuring Additional Tax Tax for Certain Children Who Have Unearned IncomeProviding Parental Information (Form 8615, lines A–C) Step 1. Amend tax return Figuring the Child's Net Unearned Income (Form 8615, Part I) Step 2. Amend tax return Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) Step 3. Amend tax return Figuring the Child's Tax (Form 8615, Part III) What's New Net Investment Income Tax. Amend tax return . Amend tax return  For tax years beginning after December 31, 2012, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax (NIIT). Amend tax return NIIT is a 3. Amend tax return 8% tax on the lesser of the net investment income or the excess of the child's modified adjusted gross income (MAGI) over the threshold amount. Amend tax return Use Form 8960, Net Investment Income Tax, to figure this tax. Amend tax return For more information on NIIT, go to www. Amend tax return irs. Amend tax return gov and enter “Net Investment Income Tax” in the search box. Amend tax return Introduction This chapter discusses the following two rules that may affect the tax on unearned income of certain children. Amend tax return If the child's interest and dividend income (including capital gain distributions) total less than $10,000, the child's parent may be able to choose to include that income on the parent's return rather than file a return for the child. Amend tax return (See Parent's Election To Report Child's Interest and Dividends , later. Amend tax return ) If the child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Amend tax return (See Tax for Certain Children Who Have Unearned Income , later. Amend tax return ) For these rules, the term “child” includes a legally adopted child and a stepchild. Amend tax return These rules apply whether or not the child is a dependent. Amend tax return Useful Items - You may want to see: Publication 929 Tax Rules for Children and Dependents Form (and Instructions) 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends Which Parent's Return To Use If a child's parents are married to each other and file a joint return, use the joint return to figure the tax on the child's unearned income. Amend tax return The tax rate and other return information from that return are used to figure the child's tax as explained later under Tax for Certain Children Who Have Unearned Income . Amend tax return Parents Who Do Not File a Joint Return For parents who do not file a joint return, the following discussions explain which parent's tax return must be used to figure the tax. Amend tax return Only the parent whose tax return is used can make the election described under Parent's Election To Report Child's Interest and Dividends . Amend tax return Parents are married. Amend tax return   If the child's parents file separate returns, use the return of the parent with the greater taxable income. Amend tax return Parents not living together. Amend tax return   If the child's parents are married to each other but not living together, and the parent with whom the child lives (the custodial parent) is considered unmarried, use the return of the custodial parent. Amend tax return If the custodial parent is not considered unmarried, use the return of the parent with the greater taxable income. Amend tax return   For an explanation of when a married person living apart from his or her spouse is considered unmarried, see Head of Household in chapter 2. Amend tax return Parents are divorced. Amend tax return   If the child's parents are divorced or legally separated, and the parent who had custody of the child for the greater part of the year (the custodial parent) has not remarried, use the return of the custodial parent. Amend tax return Custodial parent remarried. Amend tax return   If the custodial parent has remarried, the stepparent (rather than the noncustodial parent) is treated as the child's other parent. Amend tax return Therefore, if the custodial parent and the stepparent file a joint return, use that joint return. Amend tax return Do not use the return of the noncustodial parent. Amend tax return   If the custodial parent and the stepparent are married, but file separate returns, use the return of the one with the greater taxable income. Amend tax return If the custodial parent and the stepparent are married but not living together, the earlier discussion under Parents not living together applies. Amend tax return Parents never married. Amend tax return   If a child's parents have never been married to each other, but lived together all year, use the return of the parent with the greater taxable income. Amend tax return If the parents did not live together all year, the rules explained earlier under Parents are divorced apply. Amend tax return Widowed parent remarried. Amend tax return   If a widow or widower remarries, the new spouse is treated as the child's other parent. Amend tax return The rules explained earlier under Custodial parent remarried apply. Amend tax return Parent's Election To Report Child's Interest and Dividends You may be able to elect to include your child's interest and dividend income (including capital gain distributions) on your tax return. Amend tax return If you do, your child will not have to file a return. Amend tax return You can make this election only if all the following conditions are met. Amend tax return Your child was under age 19 (or under age 24 if a full-time student) at the end of the year. Amend tax return Your child had income only from interest and dividends (including capital gain distributions and Alaska Permanent Fund dividends). Amend tax return The child's gross income was less than $10,000. Amend tax return The child is required to file a return unless you make this election. Amend tax return The child does not file a joint return for the year. Amend tax return No estimated tax payment was made for the year, and no overpayment from the previous year (or from any amended return) was applied to this year under your child's name and social security number. Amend tax return No federal income tax was taken out of your child's income under the backup withholding rules. Amend tax return You are the parent whose return must be used when applying the special tax rules for children. Amend tax return (See Which Parent's Return To Use , earlier. Amend tax return ) These conditions are also shown in Figure 31-A. Amend tax return Certain January 1 birthdays. Amend tax return   A child born on January 1, 1995, is considered to be age 19 at the end of 2013. Amend tax return You cannot make this election for such a child unless the child was a full-time student. Amend tax return   A child born on January 1, 1990, is considered to be age 24 at the end of 2013. Amend tax return You cannot make this election for such a child. Amend tax return Full-time student. Amend tax return   A full-time student is a child who during some part of each of any 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time on-farm training course given by a school or a state, county, or local government agency. Amend tax return A school includes a technical, trade, or mechanical school. Amend tax return It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. Amend tax return How to make the election. Amend tax return   Make the election by attaching Form 8814 to your Form 1040. Amend tax return (If you make this election, you cannot file Form 1040A or Form 1040EZ. Amend tax return ) Attach a separate Form 8814 for each child for whom you make the election. Amend tax return You can make the election for one or more children and not for others. Amend tax return Effect of Making the Election The federal income tax on your child's income may be more if you make the Form 8814 election. Amend tax return Rate may be higher. Amend tax return   If your child received qualified dividends or capital gain distributions, you may pay up to $100 more tax if you make this election instead of filing a separate tax return for the child. Amend tax return This is because the tax rate on the child's income between $1,000 and $2,000 is 10% if you make this election. Amend tax return However, if you file a separate return for the child, the tax rate may be as low as 0% (zero percent) because of the preferential tax rates for qualified dividends and capital gain distributions. Amend tax return Deductions you cannot take. Amend tax return   By making the Form 8814 election, you cannot take any of the following deductions that the child would be entitled to on his or her return. Amend tax return The additional standard deduction if the child is blind. Amend tax return The deduction for a penalty on an early withdrawal of your child's savings. Amend tax return Itemized deductions (such as your child's investment expenses or charitable contributions). Amend tax return Reduced deductions or credits. Amend tax return   If you use Form 8814, your increased adjusted gross income may reduce certain deductions or credits on your return including the following. Amend tax return Deduction for contributions to a traditional individual retirement arrangement (IRA). Amend tax return Deduction for student loan interest. Amend tax return Itemized deductions for medical expenses, casualty and theft losses, and certain miscellaneous expenses. Amend tax return Credit for child and dependent care expenses. Amend tax return Child tax credit. Amend tax return Education tax credits. Amend tax return Earned income credit. Amend tax return Penalty for underpayment of estimated tax. Amend tax return   If you make this election for 2013 and did not have enough tax withheld or pay enough estimated tax to cover the tax you owe, you may be subject to a penalty. Amend tax return If you plan to make this election for 2014, you may need to increase your federal income tax withholding or your estimated tax payments to avoid the penalty. Amend tax return See chapter 4 for more information. Amend tax return Figuring Child's Income Use Form 8814, Part I, to figure your child's interest and dividend income to report on your return. Amend tax return Only the amount over $2,000 is added to your income. Amend tax return The amount over $2,000 is shown on Form 8814, line 6. Amend tax return Unless the child's income includes qualified dividends or capital gain distributions (discussed next), the same amount is shown on Form 8814, line 12. Amend tax return Include the amount from Form 8814, line 12, on Form 1040, line 21. Amend tax return Enter “Form 8814” on the dotted line next to line 21. Amend tax return If you file more than one Form 8814, include the total amounts from line 12 of all your Forms 8814 on Form 1040, line 21. Amend tax return Capital gain distributions and qualified dividends. Amend tax return   If your child's dividend income included any capital gain distributions, see Capital gain distributions under Figuring Child's Income in Publication 929, Part 2. Amend tax return If your child's dividend income included any qualified dividends, see Qualified dividends under Figuring Child's Income in Publication 929, Part 2. Amend tax return Figuring Additional Tax Use Form 8814, Part II, to figure the tax on the $2,000 of your child's interest and dividends that you do not include in your income. Amend tax return This tax is added to the tax figured on your income. Amend tax return This additional tax is the smaller of: 10% × (your child's gross income − $1,000), or $100. Amend tax return Include the amount from line 15 of all your Forms 8814 in the total on Form 1040, line 44. Amend tax return Check box a on Form 1040, line 44. Amend tax return Figure 31-A. Amend tax return Can You Include Your Child's Income On Your Tax Return? Please click here for the text description of the image. Amend tax return Figure 31–A. Amend tax return Can You Include Your Child's Income On Your Tax Return? Tax for Certain Children Who Have Unearned Income If a child's interest, dividends, and other unearned income total more than $2,000, part of that income may be taxed at the parent's tax rate instead of the child's tax rate. Amend tax return If the parent does not or cannot choose to include the child's income on the parent's return, use Form 8615 to figure the child's tax. Amend tax return Attach the completed form to the child's Form 1040 or Form 1040A. Amend tax return When Form 8615 must be filed. Amend tax return   Form 8615 must be filed for a child if all of the following statements are true. Amend tax return The child's investment income was more than $2,000. Amend tax return The child is required to file a return for 2013. Amend tax return The child either: Was under age 18 at the end of the year, Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or Was over age 18 and under age 24 at the end of the year, was a full-time student, and did not have earned income that was more than half of his or her support. Amend tax return At least one of the child's parents was alive at the end of 2013. Amend tax return The child does not file a joint return for 2013. Amend tax return These conditions are also shown in  Figure 31-B. Amend tax return Earned income. Amend tax return   Earned income includes salaries, wages, tips, and other payments received for personal services performed. Amend tax return It does not include unearned income as defined later in this chapter. Amend tax return Support. Amend tax return   Your child's support includes all amounts spent to provide the child with food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Amend tax return To figure your child's support, count support provided by you, your child, and others. Amend tax return However, a scholarship received by your child is not considered support if your child is a full-time student. Amend tax return See chapter 3 for details about support. Amend tax return Certain January 1 birthdays. Amend tax return   Use the following chart to determine whether certain children with January 1 birthdays meet condition 3 under When Form 8615 must be filed. Amend tax return Figure 31-B. Amend tax return Do You Have To Use Form 8615 To Figure Your Child's Tax? Please click here for the text description of the image. Amend tax return Figure 31-B. Amend tax return Do You Have To Use Form 8615 To Figure Your Child's Tax?    IF a child was born on. Amend tax return . Amend tax return . Amend tax return THEN, at the end of 2013, the child is considered to be. Amend tax return . Amend tax return . Amend tax return January 1, 1996 18* January 1, 1995 19** January 1, 1990 24*** *This child is not under age 18. Amend tax return The child meets condition 3 only if the child did not have earned income that was more than half of the child's support. Amend tax return  **This child meets condition 3 only if the child was a full-time student who did not have earned income that was more than half of the child's support. Amend tax return  ***Do not use Form 8615 for this child. Amend tax return Providing Parental Information (Form 8615, lines A–C) On Form 8615, lines A and B, enter the parent's name and social security number. Amend tax return (If the parents filed a joint return, enter the name and social security number listed first on the joint return. Amend tax return ) On line C, check the box for the parent's filing status. Amend tax return See Which Parent's Return To Use at the beginning of this chapter for information on which parent's return information must be used on Form 8615. Amend tax return Parent with different tax year. Amend tax return   If the parent and the child do not have the same tax year, complete Form 8615 using the information on the parent's return for the tax year that ends in the child's tax year. Amend tax return Parent's return information not known timely. Amend tax return   If the information needed from the parent's return is not known by the time the child's return is due (usually April 15), you can file the return using estimates. Amend tax return   You can use any reasonable estimate. Amend tax return This includes using information from last year's return. Amend tax return If you use an estimated amount on Form 8615, enter “Estimated” on the line next to the amount. Amend tax return    When you get the correct information, file an amended return on Form 1040X, Amended U. Amend tax return S. Amend tax return Individual Income Tax Return. Amend tax return   Instead of using estimates, you can get an automatic 6-month extension of time to file if, by the date your return is due, you file Form 4868, Application for Automatic Extension of Time To File U. Amend tax return S. Amend tax return Individual Income Tax Return. Amend tax return Extensions are discussed in chapter 1. Amend tax return Step 1. Amend tax return Figuring the Child's Net Unearned Income (Form 8615, Part I) The first step in figuring a child's tax using Form 8615 is to figure the child's net unearned income. Amend tax return To do that, use Form 8615, Part I. Amend tax return Line 1 (unearned income). Amend tax return   If the child had no earned income, enter on this line the adjusted gross income shown on the child's return. Amend tax return Adjusted gross income is shown on Form 1040, line 38, or Form 1040A, line 22. Amend tax return Form 1040EZ cannot be used if Form 8615 must be filed. Amend tax return   If the child had earned income, figure the amount to enter on Form 8615, line 1, by using the worksheet in the instructions for the form. Amend tax return   However, if the child has: excluded any foreign earned income, deducted either a loss from self-employment, or deducted a net operating loss from another year, then use the Alternate Worksheet for Form 8615, Line 1, in Publication 929 to figure the amount to enter on Form 8615, line 1. Amend tax return Unearned income defined. Amend tax return   Unearned income is generally all income other than salaries, wages, and other amounts received as pay for work actually done. Amend tax return It includes taxable interest, dividends (including capital gain distributions), capital gains, unemployment compensation, the taxable part of social security and pension payments, and certain distributions from trusts. Amend tax return Unearned income includes amounts produced by assets the child obtained with earned income (such as interest on a savings account into which the child deposited wages). Amend tax return Nontaxable income. Amend tax return   For this purpose, unearned income includes only amounts the child must include in total income. Amend tax return Nontaxable unearned income, such as tax-exempt interest and the nontaxable part of social security and pension payments, is not included. Amend tax return Income from property received as a gift. Amend tax return   A child's unearned income includes all income produced by property belonging to the child. Amend tax return This is true even if the property was transferred to the child, regardless of when the property was transferred or purchased or who transferred it. Amend tax return   A child's unearned income includes income produced by property given as a gift to the child. Amend tax return This includes gifts to the child from grandparents or any other person and gifts made under the Uniform Gift to Minors Act. Amend tax return Example. Amend tax return Amanda Black, age 13, received the following income. Amend tax return Dividends — $800 Wages — $2,100 Taxable interest — $1,200 Tax-exempt interest — $100 Net capital gains — $100 The dividends were qualified dividends on stock given to her by her grandparents. Amend tax return Amanda's unearned income is $2,100. Amend tax return This is the total of the dividends ($800), taxable interest ($1,200), and net capital gains ($100). Amend tax return Her wages are earned (not unearned) income because they are received for work actually done. Amend tax return Her tax-exempt interest is not included because it is nontaxable. Amend tax return Trust income. Amend tax return   If a child is the beneficiary of a trust, distributions of taxable interest, dividends, capital gains, and other unearned income from the trust are unearned income to the child. Amend tax return   However, for purposes of completing Form 8615, a taxable distribution from a qualified disability trust is considered earned income, not unearned income. Amend tax return Line 2 (deductions). Amend tax return   If the child does not itemize deductions on Schedule A (Form 1040), enter $2,000 on line 2. Amend tax return   If the child does itemize deductions, enter on line 2 the larger of: $1,000 plus the portion of the child's itemized deductions on Schedule A (Form 1040), line 29, that are directly connected with the production of unearned income entered on line 1, or $2,000. Amend tax return Directly connected. Amend tax return   Itemized deductions are directly connected with the production of unearned income if they are for expenses paid to produce or collect taxable income or to manage, conserve, or maintain property held for producing income. Amend tax return These expenses include custodian fees and service charges, service fees to collect taxable interest and dividends, and certain investment counsel fees. Amend tax return   These expenses are added to certain other miscellaneous itemized deductions on Schedule A (Form 1040). Amend tax return Only the amount greater than 2% of the child's adjusted gross income can be deducted. Amend tax return See chapter 28 for more information. Amend tax return Example 1. Amend tax return Roger, age 12, has unearned income of $8,000, no other income, no adjustments to income, and itemized deductions of $300 (net of the 2% limit) that are directly connected with his unearned income. Amend tax return His adjusted gross income is $8,000, which is entered on Form 1040, line 38, and on Form 8615, line 1. Amend tax return Roger enters $2,000 on line 2 because that is more than the total of $1,000 plus his directly connected itemized deductions of $300. Amend tax return Example 2. Amend tax return Eleanor, age 8, has unearned income of $16,000 and an early withdrawal penalty of $100. Amend tax return She has no other income. Amend tax return She has itemized deductions of $1,050 (net of the 2% limit) that are directly connected with the production of her unearned income. Amend tax return Her adjusted gross income, entered on line 1, is $15,900 ($16,000 − $100). Amend tax return The amount on line 2 is $2,050. Amend tax return This is the larger of: $1,000 plus the $1,050 of directly connected itemized deductions, or $2,000. Amend tax return Line 3. Amend tax return   Subtract line 2 from line 1 and enter the result on this line. Amend tax return If zero or less, do not complete the rest of the form. Amend tax return However, you must still attach Form 8615 to the child's tax return. Amend tax return Figure the tax on the child's taxable income in the normal manner. Amend tax return Line 4 (child's taxable income). Amend tax return   Enter on line 4 the child's taxable income from Form 1040, line 43, or Form 1040A, line 27. Amend tax return   However, if the child files Form 2555 or 2555-EZ to claim the foreign earned income exclusion, housing exclusion, or housing deduction, see the Form 8615 instructions or Pub. Amend tax return 929. Amend tax return Line 5 (net unearned income). Amend tax return   A child's net unearned income cannot be more than his or her taxable income. Amend tax return Enter on Form 8615, line 5, the smaller of line 3 or line 4. Amend tax return This is the child's net unearned income. Amend tax return   If zero or less, do not complete the rest of the form. Amend tax return However, you must still attach Form 8615 to the child's tax return. Amend tax return Figure the tax on the child's taxable income in the normal manner. Amend tax return Step 2. Amend tax return Figuring Tentative Tax at the Parent's Tax Rate (Form 8615, Part II) The next step in completing Form 8615 is to figure a tentative tax on the child's net unearned income at the parent's tax rate. Amend tax return The tentative tax at the parent's tax rate is the difference between the tax on the parent's taxable income figured with the child's net unearned income (plus the net unearned income of any other child whose Form 8615 includes the tax return information of that parent) and the tax figured without it. Amend tax return When figuring the tentative tax at the parent's tax rate on Form 8615, do not refigure any of the exclusions, deductions, or credits on the parent's return because of the child's net unearned income. Amend tax return For example, do not refigure the medical expense deduction. Amend tax return Figure the tentative tax on Form 8615, lines 6 through 13. Amend tax return Note. Amend tax return If the child or parent has any capital gains or losses, get Publication 929 for help in completing Form 8615, Part II. Amend tax return Line 6 (parent's taxable income). Amend tax return   Enter on line 6 the parent's taxable income from Form 1040, line 43, Form 1040A, line 27, or Form 1040EZ, line 6. Amend tax return   If the Foreign Earned Income Tax Worksheet (in the Form 1040 instructions) was used to figure the parent's tax, enter the amount from line 3 of that worksheet instead of the parent's taxable income. Amend tax return Line 7 (net unearned income of other children). Amend tax return   If the tax return information of the parent is also used on any other child's Form 8615, enter on line 7 the total of the amounts from line 5 of all the other children's Forms 8615. Amend tax return Do not include the amount from line 5 of the Form 8615 being completed. Amend tax return Example. Amend tax return Paul and Jane Persimmon have three children, Sharon, Jerry, and Mike, who must attach Form 8615 to their tax returns. Amend tax return The children's net unearned income amounts on line 5 of their Forms 8615 are: Sharon — $800 Jerry — $600 Mike — $1,000 Line 7 of Sharon's Form 8615 will show $1,600, the total of the amounts on line 5 of Jerry's and Mike's Forms 8615. Amend tax return Line 7 of Jerry's Form 8615 will show $1,800 ($800 + $1,000). Amend tax return Line 7 of Mike's Form 8615 will show $1,400 ($800 + $600). Amend tax return Other children's information not available. Amend tax return   If the net unearned income of the other children is not available when the return is due, either file the return using estimates or get an extension of time to file. Amend tax return See Parent's return information not known timely , earlier. Amend tax return Line 11 (tentative tax). Amend tax return   Subtract line 10 from line 9 and enter the result on this line. Amend tax return This is the tentative tax. Amend tax return   If line 7 is blank, skip lines 12a and 12b and enter the amount from line 11 on line 13. Amend tax return Also skip the discussion for lines 12a and 12b that follows. Amend tax return Lines 12a and 12b (dividing the tentative tax). Amend tax return   If an amount is entered on line 7, divide the tentative tax shown on line 11 among the children according to each child's share of the total net unearned income. Amend tax return This is done on lines 12a, 12b, and 13. Amend tax return Add the amount on line 7 to the amount on line 5 and enter the total on line 12a. Amend tax return Divide the amount on line 5 by the amount on line 12a and enter the result, as a decimal, on line 12b. Amend tax return Example. Amend tax return In the earlier example under Line 7 (net unearned income of other children), Sharon's Form 8615 shows $1,600 on line 7. Amend tax return The amount entered on line 12a is $2,400, the total of the amounts on lines 5 and 7 ($800 + $1,600). Amend tax return The decimal on line 12b is  . Amend tax return 333, figured as follows and rounded to three places. Amend tax return   $800 = . Amend tax return 333     $2,400   Step 3. Amend tax return Figuring the Child's Tax (Form 8615, Part III) The final step in figuring a child's tax using Form 8615 is to determine the larger of: The total of: The child's share of the tentative tax based on the parent's tax rate, plus The tax on the child's taxable income in excess of net unearned income, figured at the child's tax rate, or The tax on the child's taxable income, figured at the child's tax rate. Amend tax return This is the child's tax. Amend tax return It is figured on Form 8615, lines 14 through 18. Amend tax return Alternative minimum tax. Amend tax return   A child may be subject to alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law. Amend tax return See Alternative Minimum Tax (AMT) in chapter 30. Amend tax return    For more information on who is liable for AMT and how to figure it, see Form 6251, Alternative Minimum Tax—Individuals. Amend tax return For information on special limits that apply to a child who files Form 6251, see Certain Children Under Age 24 in the Instructions for Form 6251. Amend tax return Prev  Up  Next   Home   More Online Publications