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Filing 1040nr Ez

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Filing 1040nr Ez

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

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Tulsa, OK

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The Filing 1040nr Ez

Filing 1040nr ez Index A Abandonment, Abandonment Accounting method Accrual, Accrual Method Cash, Cash Method Change in, Changes in Methods of Accounting Crop, Crop method. Filing 1040nr ez Farm inventory, Farm Inventory Accounting periods, Introduction Accrual method of accounting, Accrual Method Additional Medicare Tax withholding, What's New for 2013, Additional Medicare Tax. Filing 1040nr ez Adjusted basis for installment sale, Adjusted basis for installment sale purposes. Filing 1040nr ez Adjusted basis of assets, Adjusted Basis Agricultural activity codes, Schedule F, Reminders Agricultural program payments, Agricultural Program Payments Agricultural structure, defined, Agricultural structure. Filing 1040nr ez Alternative Depreciation System (ADS), Required use of ADS. Filing 1040nr ez , ADS election. Filing 1040nr ez Amortization Going into business, Business Start-Up Costs Reforestation expenses, Reforestation Costs Section 197 intangibles, Section 197 Intangibles Assessments By conservation district, Assessment by Conservation District Depreciable property, Assessment for Depreciable Property Assistance (see Tax help) Automobiles, depreciation, Limits for passenger automobiles. Filing 1040nr ez B Bankruptcy, Bankruptcy. Filing 1040nr ez Barter income, Barter income. Filing 1040nr ez Basis Adjusted, Adjusted basis. Filing 1040nr ez Installment sale, Adjusted basis for installment sale purposes. Filing 1040nr ez Involuntary conversion, Basis for depreciation. Filing 1040nr ez Like-kind exchange, Basis for depreciation. Filing 1040nr ez Partner's basis, Property Distributed From a Partnership or Corporation Replacement property, Basis of replacement property. Filing 1040nr ez Shareholder's basis, Property Distributed From a Partnership or Corporation Basis of assets Adjusted basis, Adjusted Basis Allocating to several assets, Allocating the Basis Changed to business use, Property changed from personal to business or rental use. Filing 1040nr ez Constructing assets, Constructing assets. Filing 1040nr ez Cost, Cost Basis Decreases, Decreases to Basis Depreciation, What Is the Basis for Depreciation? Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Gifts, Property Received as a Gift Increases, Increases to Basis Real property, Real Property Received for services, Property received for services. Filing 1040nr ez Uniform capitalization rules, Uniform Capitalization Rules Below-market loans, Below-market loans. Filing 1040nr ez Books and records, Importance of Records Breeding fees, Breeding Fees Business income limit, section 179 expense deduction, Business Income Limit Business use of home, Business Use of Your Home C Canceled debt, Cancellation of Debt Capital assets, Capital Assets Capital expenses, Capital Expenses Car expenses, Truck and Car Expenses Cash method of accounting, Cash Method Casualties and thefts Adjustments to basis, Adjustments to basis. Filing 1040nr ez Casualty, defined, Casualty. Filing 1040nr ez Disaster area losses, Disaster Area Losses Leased property, Leased property. Filing 1040nr ez Livestock, Livestock or produce bought for resale. Filing 1040nr ez , Raised draft, breeding, dairy, or sporting animals. Filing 1040nr ez Reimbursement, Insurance and other reimbursements. Filing 1040nr ez Reporting gains and losses, Reporting Gains and Losses Theft, defined, Theft. Filing 1040nr ez Change in accounting method, Changes in Methods of Accounting Chickens, purchased, Chickens, seeds, and young plants. Filing 1040nr ez Christmas trees, Christmas tree cultivation. Filing 1040nr ez , Christmas trees. Filing 1040nr ez Club dues, Club dues and membership fees. Filing 1040nr ez Comments on publication, Comments and suggestions. Filing 1040nr ez Commodity Futures, Hedging (Commodity Futures) Wages, Noncash wages. Filing 1040nr ez Commodity Credit Corporation (CCC) Loans, Commodity Credit Corporation (CCC) Loans Market gain, Market Gain Community property, Community property. Filing 1040nr ez , Community property. Filing 1040nr ez Computer, software, Computer software. Filing 1040nr ez Condemnation, Casualties, Thefts, and Condemnations, Condemnation Conservation Cost-sharing exclusion, Conservation Expenses District assessments, Assessment by Conservation District Expenses, Conservation Expenses Plans, Conservation plan. Filing 1040nr ez Conservation Reserve Program, Conservation Reserve Program (CRP) payments. Filing 1040nr ez Conservation Reserve Program (CRP), Conservation Reserve Program (CRP) Constructing assets, Constructing assets. Filing 1040nr ez Constructive receipt of income, Constructive receipt. Filing 1040nr ez Contamination, Soil or other environmental contamination. Filing 1040nr ez Contract price, Contract price. Filing 1040nr ez Converted wetland, Converted Wetland and Highly Erodible Cropland Cooperatives, income from, Income From Cooperatives Cost-sharing exclusion, Cost-Sharing Exclusion (Improvements) Counter-cyclical payments, Direct payments and counter-cyclical payments. Filing 1040nr ez , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Credits Employment, Employment Credits Fuel tax, Fuel tax credit and refund. Filing 1040nr ez , How To Claim a Credit or Refund, Claiming a Credit Social security and Medicare, Earning credits in 2013. Filing 1040nr ez Social security coverage, How to become insured under social security. Filing 1040nr ez State unemployment tax, Tax rate and credit. Filing 1040nr ez Crew leaders, Crew Leaders Crop Destroyed, Standing crop destroyed by casualty. Filing 1040nr ez Insurance proceeds, Crop Insurance and Crop Disaster Payments Method of accounting, Crop method. Filing 1040nr ez Shares, Rents (Including Crop Shares) Unharvested, Cost of raising unharvested crops. Filing 1040nr ez , Section 1231 transactions. Filing 1040nr ez , Gain or loss. Filing 1040nr ez Cropland, highly erodible, Converted Wetland and Highly Erodible Cropland D Damage Casualties and thefts, Casualties and Thefts Crop insurance, Crop Insurance and Crop Disaster Payments Tree seedlings, Tree Seedlings Debt Bad, Nonbusiness bad debt. Filing 1040nr ez Canceled, Cancellation of Debt, Canceled debt excluded from income. Filing 1040nr ez , Cancellation of debt. Filing 1040nr ez , Canceled debt. Filing 1040nr ez Nonrecourse, Amount realized on a nonrecourse debt. Filing 1040nr ez Qualified farm, Qualified Farm Debt Qualified principal residence, Qualified Principal Residence Debt Recourse, Amount realized on a recourse debt. Filing 1040nr ez Depletion, Depletion Depreciation, Claiming the Special Depreciation Allowance ADS election, ADS election. Filing 1040nr ez Conservation assets, Depreciable conservation assets. Filing 1040nr ez Deduction, Overview of Depreciation Incorrect amount deducted, How Do You Correct Depreciation Deductions? Limit for automobiles, Limits for passenger automobiles. Filing 1040nr ez Listed property, Additional Rules for Listed Property Raised livestock, Livestock. Filing 1040nr ez Recapture, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Section 1250 Property When to file, Do You Have To File Form 4562? Depreciation allowable, Basis adjustment for depreciation allowed or allowable. Filing 1040nr ez Depreciation allowed, Basis adjustment for depreciation allowed or allowable. Filing 1040nr ez Direct payments, Direct payments and counter-cyclical payments. Filing 1040nr ez , Payments Under the Farm Security and Rural Investment Act of 2002 and Under the Food, Conservation, and Energy Act of 2008 Disaster area losses, Disaster Area Losses Disaster payments, Crop Insurance and Crop Disaster Payments Disaster relief grants, Federal disaster relief grants. Filing 1040nr ez Disaster relief payments, Qualified disaster relief payments. Filing 1040nr ez Dispositions, Sale or other disposal of land during 9-year period. Filing 1040nr ez , Gain on sale of farmland. Filing 1040nr ez , Introduction Domestic production activities deduction, Domestic Production Activities Deduction Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E e-file, Reminders Easement, Easements and rights-of-way. Filing 1040nr ez , Easements. Filing 1040nr ez Election ADS depreciation, Electing ADS. Filing 1040nr ez , ADS election. Filing 1040nr ez Amortization Business start-up costs, Business Start-Up Costs Reforestation costs, Reforestation Costs Crop method, Election to use crop method. Filing 1040nr ez Cutting of timber, Election to treat cutting as a sale or exchange. Filing 1040nr ez Deducting conservation expenses, When to Deduct or Capitalize Not excluding cost-sharing payments, Electing not to exclude payments. Filing 1040nr ez Out of installment method, Electing out of the installment method. Filing 1040nr ez Postponing casualty gain, Postponing Gain Postponing reporting crop insurance proceeds, Election to postpone reporting until the following year. Filing 1040nr ez Section 179 expense deduction, How Do You Elect the Deduction? Electronic filing, Reminders Embryo transplants, Transplanted embryo. Filing 1040nr ez Employer identification number, Reminders, Employer identification number (EIN). Filing 1040nr ez Endangered species recovery expenses, Endangered species recovery expenses. Filing 1040nr ez Environmental contamination, Soil or other environmental contamination. Filing 1040nr ez Estimated tax Farm gross income, Gross Income From Farming Gross income, Gross Income Penalties, Estimated Tax Penalty for 2013 Exchanges Basis Like-kind, Like-Kind Exchanges Nontaxable, Nontaxable Exchanges Partially nontaxable, Partially Nontaxable Exchanges Taxable, Taxable Exchanges Like-kind, Like-Kind Exchanges Nontaxable, Like-Kind Exchanges Excise taxes Credit, Claiming a Credit Diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Farming purposes, Fuels Used in Farming Home use of fuels, Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines Off-highway uses, Fuels Used in Off-Highway Business Use Refund, Claiming a Refund F Fair market value defined, Fair market value (FMV). Filing 1040nr ez , Fair market value (FMV). Filing 1040nr ez Family member Business expenses, Special rule for related persons. Filing 1040nr ez Installment sale, Sale to a related person. Filing 1040nr ez Like-kind exchange, Like-kind exchanges between related persons. Filing 1040nr ez Loss on sale or exchange of property, Losses from sales or exchanges between related persons. Filing 1040nr ez Personal-use property, Personal-use property. Filing 1040nr ez Social security coverage, Family Employees Farm Business expenses, Farm Business Expenses Business, defined, Business of Farming Defined, Farm defined. Filing 1040nr ez , Farm. Filing 1040nr ez Income averaging, Income Averaging for Farmers Rental, Farm rental. Filing 1040nr ez Sale of, Sale of a Farm Farmer, Farmer. Filing 1040nr ez Federal unemployment tax (FUTA), Federal Unemployment (FUTA) Tax Fertilizer, Fertilizer and Lime, Fertilizer and Lime Foreclosure, Foreclosure or Repossession Forestation costs, Forestation and reforestation costs. Filing 1040nr ez Form 1099-A, Form 1099-A. Filing 1040nr ez , Forms 1099-A and 1099-C. Filing 1040nr ez 1099-C, Cancellation of Debt, Form 1099-C. Filing 1040nr ez , Forms 1099-A and 1099-C. Filing 1040nr ez 1099-G, Market Gain, Payment to More Than One Person 1099-MISC, Reminders, Nonemployee compensation. Filing 1040nr ez 1099-PATR, Form 1099-PATR. Filing 1040nr ez 1128, Introduction 2210-F, Estimated Tax Penalty for 2013 3115, Changes in Methods of Accounting 4136, Claiming a Credit 4562, Do You Have To File Form 4562? 4797, Form 4797. Filing 1040nr ez , Recapture. Filing 1040nr ez , Reporting the exchange. Filing 1040nr ez 4835, Rents (Including Crop Shares) 5213, Using the presumption later. Filing 1040nr ez 6252, Form 6252. Filing 1040nr ez 8822, Reminders 8824, Reporting the exchange. Filing 1040nr ez 8849, Claiming a Refund 8886, Reminders 940, Form 940. Filing 1040nr ez 943, Form 943. Filing 1040nr ez 982, Form 982 I-9, Form I-9. Filing 1040nr ez SS-4, Reminders, Employer identification number (EIN). Filing 1040nr ez SS-5, Obtaining a social security number. Filing 1040nr ez T (Timber), Form T (Timber). Filing 1040nr ez W-2, Form W-2. Filing 1040nr ez W-4, Reminders, New hire reporting. Filing 1040nr ez , Form W-4. Filing 1040nr ez W-4V, Commodity Credit Corporation (CCC) Loans, Crop Insurance and Crop Disaster Payments W-7, Obtaining an individual taxpayer identification number. Filing 1040nr ez Free tax services, How To Get Tax Help, Free help with your tax return. Filing 1040nr ez Fuel tax credit or refund, Fuel tax credit and refund. Filing 1040nr ez , How To Claim a Credit or Refund G Gains and losses Basis of assets, Cost Basis Capital assets, defined, Capital Assets Casualty, How To Figure a Loss, Figuring a Gain Installment sales, Installment Sales Livestock, Livestock Long- or short-term, Long and Short Term Ordinary or capital, Ordinary or Capital Gain or Loss Sale of farm, Sale of a Farm Section 1231, Section 1231 Gains and Losses Theft, How To Figure a Loss, Figuring a Gain Timber, Timber General asset accounts, How Do You Use General Asset Accounts? Gifts, Crop shares you give to others (gift). Filing 1040nr ez , Cost related to gifts. Filing 1040nr ez , Property Received as a Gift, Gift. Filing 1040nr ez Going into business, Business Start-Up Costs Grants, disaster relief, Federal disaster relief grants. Filing 1040nr ez Gross profit percentage, Gross profit percentage. Filing 1040nr ez Gross profit, defined, Gross profit. Filing 1040nr ez Guarantee, Debt not payable on demand. Filing 1040nr ez H Health insurance deduction, Self-employed health insurance deduction. Filing 1040nr ez Hedging, Hedging (Commodity Futures) Help (see Tax help) Highway use tax, Highway use tax. Filing 1040nr ez Holding period, Holding period. Filing 1040nr ez Horticultural structure, Horticultural structure. Filing 1040nr ez I Illegal irrigation subsidy, Illegal federal irrigation subsidy. Filing 1040nr ez Important dates, Important Dates for 2014 Improvements, Cost-Sharing Exclusion (Improvements) Income Accounting for, Accounting Methods Accrual method of accounting, Income Canceled debt excluded, Cancellation of Debt From farming, Farm Income, Gross income from farming. Filing 1040nr ez , Gross Income From Farming Gross, Gross Income Not-for-profit farming, Not-for-Profit Farming Pasture, Pasture income and rental. Filing 1040nr ez Schedule F, Farm Income Withholding of tax, Federal Income Tax Withholding Income averaging (see Farm: Income averaging) Incorrect amount of depreciation deducted, How Do You Correct Depreciation Deductions? Individual taxpayer identification number (ITIN), Obtaining an individual taxpayer identification number. Filing 1040nr ez Inherited property, Inherited Property Insolvency, Insolvency. Filing 1040nr ez Installment sales, Form 6252. Filing 1040nr ez Electing out, Electing out of the installment method. Filing 1040nr ez Farm, sale of, Installment Sale of a Farm Figuring income, Figuring Installment Sale Income Reporting income, Form 6252. Filing 1040nr ez Unstated interest, Unstated interest. Filing 1040nr ez Insurance, Insurance, Self-employed health insurance deduction. Filing 1040nr ez Intangible property, Section 197 Intangibles Interest Expense, Interest Income, Interest income. Filing 1040nr ez Unstated, Unstated interest. Filing 1040nr ez Inventory Items included, Farm Inventory Methods of valuation, Inventory valuation methods. Filing 1040nr ez Involuntary conversions, Involuntary Conversions, Property acquired in a like-kind exchange or involuntary conversion. Filing 1040nr ez , Introduction Irrigation Illegal subsidy, Illegal federal irrigation subsidy. Filing 1040nr ez Project, Irrigation Project L Labor hired, Labor Hired Landlord participation, Landlord Participation in Farming Lease or purchase, Lease or Purchase Life tenant (see Term interests) Like-kind exchanges, Like-Kind Exchanges, Like-Kind Exchanges Lime, Fertilizer and Lime Limits At-risk, At-Risk Limits Business use of home, Deduction limit. Filing 1040nr ez Capital losses, Treatment of Capital Losses Conservation expenses, Assessment for Depreciable Property, 25% Limit on Deduction Depreciation Business-use, What Is the Business-Use Requirement? Excluded farm debt, Exclusion limit. Filing 1040nr ez Farm losses, Losses From Operating a Farm Loss of personal-use property, Deduction Limits on Losses of Personal-Use Property Not-for-profit farming, Not-for-Profit Farming Passive activity, Passive Activity Limits Percentage depletion, Taxable income limit. Filing 1040nr ez Prepaid farm supplies, Deduction limit. Filing 1040nr ez Reforestation costs, Reforestation Costs Section 179 expense deduction Automobile, Limits for passenger automobiles. Filing 1040nr ez Business income, Business Income Limit Dollar, Dollar Limits Time to keep records, How Long To Keep Records Listed property Defined, What Is Listed Property? Passenger automobile, Passenger automobiles. Filing 1040nr ez Rules, Additional Rules for Listed Property Livestock, Section 1231 transactions. Filing 1040nr ez Casualty and theft losses, Livestock or produce bought for resale. Filing 1040nr ez Crop shares, Crop shares you use to feed livestock. Filing 1040nr ez Depreciation, Livestock. Filing 1040nr ez Diseased, Diseased livestock. Filing 1040nr ez Feed assistance, Feed Assistance and Payments Immature, Immature livestock. Filing 1040nr ez Losses, Loss of livestock. Filing 1040nr ez , Livestock Purchased, Purchased livestock. Filing 1040nr ez Raised, Raised livestock. Filing 1040nr ez Sale of, Sales of Farm Products, Livestock Unit-livestock-price, inventory valuation, Unit-livestock-price method. Filing 1040nr ez Used in a farm business, Livestock used in farm business. Filing 1040nr ez Weather-related sales, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Filing 1040nr ez Loans, Commodity Credit Corporation (CCC) Loans, Loan expenses. Filing 1040nr ez Losses At-risk limits, At-Risk Limits Casualty, Casualties, Thefts, and Condemnations Disaster areas, Disaster Area Losses Farming, Farming Losses Growing crops, Loss of growing plants, produce, and crops. Filing 1040nr ez Hobby farming, Not-for-Profit Farming Livestock, Livestock, Diseased livestock. Filing 1040nr ez Nondeductible, Other Nondeductible Items Theft, Casualties, Thefts, and Condemnations Lost income payments, Lost income payments. Filing 1040nr ez Lost property, Mislaid or lost property. Filing 1040nr ez M MACRS property Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Filing 1040nr ez Like-kind exchange, Property acquired in a like-kind exchange or involuntary conversion. Filing 1040nr ez Nontaxable transfer, Property acquired in a nontaxable transfer. Filing 1040nr ez Market gain, reporting, Market Gain Marketing quota penalties, Marketing Quota Penalties Material participation, Landlord Participation in Farming Meals, Meals. Filing 1040nr ez Membership fees, Club dues and membership fees. Filing 1040nr ez Methods of accounting, Accounting Methods Modified ACRS (MACRS) ADS election, ADS election. Filing 1040nr ez Conventions, Which Convention Applies? Depreciation methods, Which Depreciation Method Applies? Exchange, Property acquired in a like-kind exchange or involuntary conversion. Filing 1040nr ez Figuring the deduction, How Is the Depreciation Deduction Figured? Involuntary conversion, Property acquired in a like-kind exchange or involuntary conversion. Filing 1040nr ez Nontaxable transfer, Property acquired in a nontaxable transfer. Filing 1040nr ez Percentage tables, Rules for using the tables. Filing 1040nr ez Property classes, Which Property Class Applies Under GDS? Recovery periods, Which Recovery Period Applies? N New hire reporting, New hire reporting. Filing 1040nr ez Noncapital asset, Noncapital Assets Nontaxable exchanges, Like-Kind Exchanges Nontaxable transfer of MACRS property, Property acquired in a nontaxable transfer. Filing 1040nr ez Not-for-profit farming, Not-for-Profit Farming O Organizational costs, Business start-up and organizational costs. Filing 1040nr ez P Partners, limited, Limited partner. Filing 1040nr ez Partners, retired, Retired partner. Filing 1040nr ez Partners, Spouse, Business Owned and Operated by Spouses. Filing 1040nr ez Partnership, Partnership income or loss. Filing 1040nr ez Passenger automobile, Passenger automobiles. Filing 1040nr ez Pasture income, Pasture income and rental. Filing 1040nr ez Patronage dividends, Patronage Dividends Payments considered received, Payments Received or Considered Received Payments received, Payments Received or Considered Received Penalties Estimated tax, Estimated Tax Penalty for 2013 Returns, Estimated Tax Penalty for 2013 Trust fund recovery, Trust fund recovery penalty. Filing 1040nr ez Per-unit retain certificates, Per-Unit Retain Certificates Personal expenses, Personal, Living, and Family Expenses Placed in service, Placed in Service, What Is the Placed-in-Service Date? Postponing casualty gain, Postponing Gain Prepaid expense Advance premiums, Advance premiums. Filing 1040nr ez Extends useful life, Prepayment. Filing 1040nr ez Farm supplies, Prepaid Farm Supplies Livestock feed, Prepaid Livestock Feed Prizes, Prizes. Filing 1040nr ez Produce, Sales of Farm Products Property Changed to business use, Property changed from personal to business or rental use. Filing 1040nr ez Received for services, Property received for services. Filing 1040nr ez Repairs and improvements, How Do You Treat Repairs and Improvements? Section 1231, Section 1231 transactions. Filing 1040nr ez Section 1245, Section 1245 Property Section 1250, Section 1250 Property Section 1252, Section 1252 property. Filing 1040nr ez Section 1255, Section 1255 property. Filing 1040nr ez Tangible personal, Tangible personal property. Filing 1040nr ez Publications (see Tax help) Q Qualified disaster relief payments, Qualified disaster relief payments. Filing 1040nr ez Qualified farm debt, Qualified Farm Debt Qualified joint venture, Qualified joint venture. Filing 1040nr ez Qualified principal residence debt, Qualified Principal Residence Debt R Recapture Amortization, Depreciation and amortization. Filing 1040nr ez Basis reductions, Recapture of basis reductions. Filing 1040nr ez Certain depreciation, Recapture of certain depreciation. Filing 1040nr ez Cost-sharing payments, Recapture. Filing 1040nr ez Depreciation, When Do You Recapture MACRS Depreciation?, Depreciation Recapture, Depreciation recapture. Filing 1040nr ez Section 1245 property, Section 1245 Property Section 1250 property, Section 1250 Property Section 179 expense deduction, When Must You Recapture the Deduction? Section 179 GO Zone property, Recapture for qualified section 179 GO Zone property. Filing 1040nr ez Special depreciation allowance, When Must You Recapture an Allowance Recordkeeping, Importance of Records, Meals. Filing 1040nr ez Records on depreciable property, Depreciation Recapture Reforestation costs, Forestation and reforestation costs. Filing 1040nr ez , Reforestation Costs Refund Deduction taken, Refund or reimbursement. Filing 1040nr ez Fuel tax, Fuel tax credit and refund. Filing 1040nr ez , Including the Credit or Refund in Income Reimbursements Casualties and thefts, Casualty and theft losses. Filing 1040nr ez , Casualties and Thefts, Insurance and other reimbursements. Filing 1040nr ez Deduction taken, Refund or reimbursement. Filing 1040nr ez Expenses, Reimbursed expenses. Filing 1040nr ez Feed assistance, Feed Assistance and Payments Real estate taxes, Real estate taxes. Filing 1040nr ez Reforestation expenses, Qualifying costs. Filing 1040nr ez To employees, Reimbursements to employees. Filing 1040nr ez Related persons, Special rule for related persons. Filing 1040nr ez , Losses from sales or exchanges between related persons. Filing 1040nr ez , Special rules for related persons. Filing 1040nr ez , Like-kind exchanges between related persons. Filing 1040nr ez , Sale to a related person. Filing 1040nr ez , Buying replacement property from a related person. Filing 1040nr ez , Related persons. Filing 1040nr ez Rental income, Rents (Including Crop Shares) Rented property, improvements, Improvements to rented property. Filing 1040nr ez Repairs, Repairs and Maintenance Repairs and improvements, How Do You Treat Repairs and Improvements? Repayment of income, Repayment of income. Filing 1040nr ez Replacement Period, Replacement Period Property, Replacement Property Reportable transactions. Filing 1040nr ez , Reminders Repossessions, Foreclosure or Repossession Right-of-way income, Easements and rights-of-way. Filing 1040nr ez S Sale of home, Sale of your home. Filing 1040nr ez Section 179 expense deduction, Section 179 Expense Deduction How to elect, How Do You Elect the Deduction? Listed property, Additional Rules for Listed Property Qualifying property, What Property Qualifies? Recapture, When Must You Recapture the Deduction? Self-employed health insurance, Self-employed health insurance deduction. Filing 1040nr ez Self-employed health insurance deduction, Self-employed health insurance deduction. Filing 1040nr ez Self-employment tax Community property, Community property. Filing 1040nr ez Deduction, Deduction for employer-equivalent portion of self-employment tax. Filing 1040nr ez How to pay, How To Pay Self-Employment Tax Landlord participation, Landlord Participation in Farming Material participation, Material participation for landlords. Filing 1040nr ez Maximum net earnings, What's New for 2013 Methods for figuring net earnings, Methods for Figuring Net Earnings Optional method, Farm Optional Method Regular method, Regular Method Rental income, Landlord Participation in Farming Reporting, Reporting Self-Employment Tax Self-employment tax rate, Self-employment tax rate. Filing 1040nr ez Share farming, Share farmer. Filing 1040nr ez Tax rates, What's New for 2013 Who must pay, Who Must Pay Self-Employment Tax? Selling expenses, Selling expenses. Filing 1040nr ez Selling price Defined, Selling price. Filing 1040nr ez Reduced, Selling price reduced. Filing 1040nr ez Settlement costs (fees), Settlement costs. Filing 1040nr ez Social security and Medicare Credits of coverage, Earning credits in 2013. Filing 1040nr ez Withholding of tax, Social Security and Medicare Taxes Social security number, Obtaining a social security number. Filing 1040nr ez Software, computer, Computer software. Filing 1040nr ez Soil Conservation, Conservation Expenses Contamination, Soil or other environmental contamination. Filing 1040nr ez Special depreciation allowance How to elect not to claim, How Can You Elect Not To Claim the Allowance? Recapture, When Must You Recapture an Allowance Standard mileage rate, Standard mileage rate. Filing 1040nr ez Start-up costs for businesses, Business start-up and organizational costs. Filing 1040nr ez Suggestions for publication, Comments and suggestions. Filing 1040nr ez T Tangible personal property, Tangible personal property. Filing 1040nr ez Tax help, How To Get Tax Help Tax preparation fees, Tax preparation fees. Filing 1040nr ez Tax shelter At-risk limits, At-Risk Limits Defined, Tax shelter. Filing 1040nr ez Tax-free exchanges, Like-Kind Exchanges Taxes Excise, Excise Taxes Federal use, Highway use tax. Filing 1040nr ez General, Taxes Self-employment, Self-Employment Tax State and federal, State and federal income taxes. Filing 1040nr ez State and local general sales, State and local general sales taxes. Filing 1040nr ez Withholding, Federal income tax withholding. Filing 1040nr ez , Social Security and Medicare Taxes, Federal Income Tax Withholding Telephone expense, Telephone expense. Filing 1040nr ez Tenant house expenses, Tenant House Expenses Term interests, Certain term interests in property. Filing 1040nr ez Theft losses, Casualties, Thefts, and Condemnations Timber, Timber. Filing 1040nr ez , Timber Depletion, Timber Tobacco quota buyout payments, Tobacco Quota Buyout Program Payments Tobacco settlement payments, National Tobacco Growers' Settlement Trust Fund Payments Trade-in, Sale and Purchase Travel expenses, Travel Expenses Truck expenses, Truck and Car Expenses Trust fund recovery penalty, Trust fund recovery penalty. Filing 1040nr ez TTY/TDD information, How To Get Tax Help U Uniform capitalization rules Basis of assets, Uniform Capitalization Rules Inventory, Uniform capitalization rules. Filing 1040nr ez Unstated interest, Unstated interest. Filing 1040nr ez W Wages and salaries, Wages and salaries. Filing 1040nr ez Water conservation, Conservation Expenses Water well, Water well. Filing 1040nr ez , Water wells. Filing 1040nr ez Weather-related sales, livestock, Sales Caused by Weather-Related Conditions, Weather-related sales of livestock. Filing 1040nr ez Withholding Income tax, Federal Income Tax Withholding Social security and Medicare tax, Social Security and Medicare Taxes Prev  Up     Home   More Online Publications