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1040ez 2012 Form

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1040ez 2012 Form

1040ez 2012 form Publication 517 - Main Content Table of Contents Social Security CoverageCoverage of Members of the Clergy Coverage of Religious Workers (Church Employees) U. 1040ez 2012 form S. 1040ez 2012 form Citizens and Resident and Nonresident Aliens Ministerial ServicesMinisters Members of Religious Orders Christian Science Practitioners and Readers Exemption From Self-Employment (SE) TaxMembers of the Clergy Members of Recognized Religious Sects Self-Employment Tax: Figuring Net EarningsRegular Method Nonfarm Optional Method Income Tax: Income and ExpensesIncome Items Expense Items Income Tax Withholding and Estimated Tax Filing Your Return Retirement Savings ArrangementsDeducting contributions to tax-sheltered annuity plans. 1040ez 2012 form Full-time student. 1040ez 2012 form Adjusted gross income. 1040ez 2012 form More information. 1040ez 2012 form Earned Income Credit Comprehensive ExampleForm W-2 From Church Form W-2 From College Schedule C-EZ (Form 1040) Form 2106-EZ Schedule A (Form 1040) Schedule SE (Form 1040) Form 1040 Attachment 1 Attachment 2 How To Get Tax HelpLow Income Taxpayer Clinics Social Security Coverage This section gives information about which system (SECA or FICA) is used to collect social security and Medicare taxes from members of the clergy (ministers, members of a religious order, and Christian Science practitioners and readers) and religious workers (church employees). 1040ez 2012 form Coverage of Members of the Clergy The services you perform in the exercise of your ministry, of the duties required by your religious order, or of your profession as a Christian Science practitioner or reader are covered by social security and Medicare under SECA. 1040ez 2012 form Your earnings for these ministerial services (defined later) are subject to self-employment (SE) tax unless one of the following applies. 1040ez 2012 form You are a member of a religious order who has taken a vow of poverty. 1040ez 2012 form You ask the Internal Revenue Service (IRS) for an exemption from SE tax for your services and the IRS approves your request. 1040ez 2012 form See Exemption From Self-Employment (SE) Tax , later. 1040ez 2012 form You are subject only to the social security laws of a foreign country under the provisions of a social security agreement between the United States and that country. 1040ez 2012 form For more information, see Bilateral Social Security (Totalization) Agreements in Publication 54. 1040ez 2012 form Your earnings that are not from ministerial services may be subject to social security tax under FICA or SECA according to the rules that apply to taxpayers in general. 1040ez 2012 form See Ministerial Services , later. 1040ez 2012 form Ministers If you are a minister of a church, your earnings for the services you perform in your capacity as a minister are subject to SE tax, even if you perform these services as an employee of that church. 1040ez 2012 form However, you can request that the IRS grant you an exemption, as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez 2012 form For the specific services covered, see Ministerial Services , later. 1040ez 2012 form Ministers defined. 1040ez 2012 form   Ministers are individuals who are duly ordained, commissioned, or licensed by a religious body constituting a church or church denomination. 1040ez 2012 form Ministers have the authority to conduct religious worship, perform sacerdotal functions, and administer ordinances or sacraments according to the prescribed tenets and practices of that church or denomination. 1040ez 2012 form   If a church or denomination ordains some ministers and licenses or commissions others, anyone licensed or commissioned must be able to perform substantially all the religious functions of an ordained minister to be treated as a minister for social security purposes. 1040ez 2012 form Employment status for other tax purposes. 1040ez 2012 form   Even though all of your income from performing ministerial services is subject to self-employment tax for social security tax purposes, you may be an employee for income tax or retirement plan purposes in performing those same services. 1040ez 2012 form For income tax or retirement plan purposes, your income earned as an employee will be considered wages. 1040ez 2012 form Common-law employee. 1040ez 2012 form   Under common-law rules, you are considered either an employee or a self-employed person. 1040ez 2012 form Generally, you are an employee if you perform services for someone who has the legal right to control both what you do and how you do it, even if you have considerable discretion and freedom of action. 1040ez 2012 form For more information about the common-law rules, see Publication 15-A, Employer's Supplemental Tax Guide. 1040ez 2012 form   If a congregation employs you and pays you a salary, you are generally a common-law employee and income from the exercise of your ministry is wages for income tax purposes. 1040ez 2012 form However, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal services, are not wages; such amounts are self-employment income for both income tax purposes and social security tax purposes. 1040ez 2012 form Example. 1040ez 2012 form A church hires and pays you a salary to perform ministerial services subject to its control. 1040ez 2012 form Under the common-law rules, you are an employee of the church while performing those services. 1040ez 2012 form Form SS-8. 1040ez 2012 form   If you are not certain whether you are an employee or a self-employed person, you can get a determination from the IRS by filing Form SS-8. 1040ez 2012 form Members of Religious Orders If you are a member of a religious order who has not taken a vow of poverty, your earnings for ministerial services you perform as a member of the order are subject to SE tax. 1040ez 2012 form See Ministerial Services , later. 1040ez 2012 form However, you can request that the IRS grant you an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez 2012 form Vow of poverty. 1040ez 2012 form   If you are a member of a religious order and have taken a vow of poverty, you are already exempt from paying SE tax on your earnings for ministerial services you perform as an agent of your church or its agencies. 1040ez 2012 form You do not need to request a separate exemption. 1040ez 2012 form For income tax purposes, the earnings are tax free to you. 1040ez 2012 form Your earnings are considered the income of the religious order. 1040ez 2012 form Services covered under FICA at the election of the order. 1040ez 2012 form   However, even if you have taken a vow of poverty, the services you perform for your church or its agencies may be covered under social security. 1040ez 2012 form Your services are covered if your order, or an autonomous subdivision of the order, elects social security coverage for its current and future vow-of-poverty members. 1040ez 2012 form   The order or subdivision elects coverage by filing Form SS-16. 1040ez 2012 form The election may cover certain vow-of-poverty members for a retroactive period of up to 20 calendar quarters before the quarter in which it files the certificate. 1040ez 2012 form If the election is made, the order or subdivision pays both the employer's and employee's share of the tax. 1040ez 2012 form You do not pay any of the FICA tax. 1040ez 2012 form Services performed outside the order. 1040ez 2012 form   Even if you are a member of a religious order who has taken a vow of poverty and the order requires you to turn over amounts you earn, your earnings are subject to federal income tax and either SE tax or FICA tax (including estimated tax payments and/or withholding) if you: Are self-employed or an employee of an organization outside your religious community, and Perform work not required by, or done on behalf of, the order. 1040ez 2012 form   In these cases, your income from self-employment or as an employee of that outside organization is taxable to you directly. 1040ez 2012 form You may, however, be able to take a charitable deduction for the amount you turn over to the order. 1040ez 2012 form See Publication 526, Charitable Contributions. 1040ez 2012 form Rulings. 1040ez 2012 form   Organizations and individuals may request rulings from the IRS on whether they are religious orders, or members of a religious order, respectively, for FICA tax, SE tax, and federal income tax withholding purposes. 1040ez 2012 form To request a ruling, follow the procedures in Revenue Procedure 2014-1, 2014-1 I. 1040ez 2012 form R. 1040ez 2012 form B. 1040ez 2012 form 1, available at www. 1040ez 2012 form irs. 1040ez 2012 form gov/irb/2014-1_IRB/ar05. 1040ez 2012 form html. 1040ez 2012 form Christian Science Practitioners and Readers Generally, your earnings from services you perform in your profession as a Christian Science practitioner or reader are subject to SE tax. 1040ez 2012 form However, you can request an exemption as discussed under Exemption From Self-Employment (SE) Tax , later. 1040ez 2012 form Practitioners. 1040ez 2012 form   Christian Science practitioners are members in good standing of the Mother Church, The First Church of Christ, Scientist, in Boston, Massachusetts, who practice healing according to the teachings of Christian Science. 1040ez 2012 form State law specifically exempts Christian Science practitioners from licensing requirements. 1040ez 2012 form   Some Christian Science practitioners also are Christian Science teachers or lecturers. 1040ez 2012 form Income from teaching or lecturing is considered the same as income from their work as practitioners. 1040ez 2012 form Readers. 1040ez 2012 form   For tax purposes, Christian Science readers are considered the same as ordained, commissioned, or licensed ministers. 1040ez 2012 form Coverage of Religious Workers (Church Employees) If you are a religious worker (a church employee) and are not in one of the classes already discussed, your wages are generally subject to social security and Medicare tax under FICA, not SECA. 1040ez 2012 form Some exceptions are discussed next. 1040ez 2012 form Election by Church To Exclude Its Employees From FICA Coverage Churches and qualified church-controlled organizations (church organizations) that are opposed for religious reasons to the payment of social security and Medicare taxes can elect to exclude their employees from FICA coverage. 1040ez 2012 form If your employer makes this election, it does not pay the employer's portion of the FICA taxes or withhold from your pay your portion of the FICA taxes. 1040ez 2012 form Instead, your wages are subject to SECA and you must pay SE tax on your wages if they exceed $108. 1040ez 2012 form 28 during the tax year. 1040ez 2012 form However, you can request an exemption from SE tax if you are a member of a recognized religious sect, as discussed below. 1040ez 2012 form Churches and church organizations make this election by filing two copies of Form 8274. 1040ez 2012 form For more information about making this election, see Form 8274. 1040ez 2012 form Election by Certain Church Employees Who Are Opposed to Social Security and Medicare You may be able to choose to be exempt from social security and Medicare taxes, including the SE tax, if you are a member of a recognized religious sect or division and work for a church (or church-controlled nonprofit division) that does not pay the employer's part of the social security tax on wages. 1040ez 2012 form This exemption does not apply to your service, if any, as a minister of a church or as a member of a religious order. 1040ez 2012 form Make this choice by filing Form 4029. 1040ez 2012 form See Requesting Exemption—Form 4029 , later, under Members of Recognized Religious Sects. 1040ez 2012 form U. 1040ez 2012 form S. 1040ez 2012 form Citizens and Resident and Nonresident Aliens To be covered under the SE tax provisions (SECA), individuals generally must be citizens or resident aliens of the United States. 1040ez 2012 form Nonresident aliens are not covered under SECA unless a social security agreement in effect between the United States and the foreign country determines that you are covered under the U. 1040ez 2012 form S. 1040ez 2012 form social security system. 1040ez 2012 form To determine your alien status, see Publication 519, U. 1040ez 2012 form S. 1040ez 2012 form Tax Guide for Aliens. 1040ez 2012 form Residents of Puerto Rico, the U. 1040ez 2012 form S. 1040ez 2012 form Virgin Islands, Guam, the CNMI, and American Samoa. 1040ez 2012 form   If you are a resident of one of these U. 1040ez 2012 form S. 1040ez 2012 form possessions but not a U. 1040ez 2012 form S. 1040ez 2012 form citizen, for SE tax purposes you are treated the same as a citizen or resident alien of the United States. 1040ez 2012 form For information on figuring the tax, see Self-Employment Tax: Figuring Net Earnings , later. 1040ez 2012 form Ministerial Services Ministerial services, in general, are the services you perform in the exercise of your ministry, in the exercise of your duties as required by your religious order, or in the exercise of your profession as a Christian Science practitioner or reader. 1040ez 2012 form Income you receive for performing ministerial services is subject to SE tax unless you have an exemption as explained later. 1040ez 2012 form Even if you have an exemption, only the income you receive for performing ministerial services is exempt. 1040ez 2012 form The exemption does not apply to any other income. 1040ez 2012 form The following discussions provide more detailed information on ministerial services of ministers, members of a religious order, and Christian Science practitioners and readers. 1040ez 2012 form Ministers Most services you perform as a minister, priest, rabbi, etc. 1040ez 2012 form , are ministerial services. 1040ez 2012 form These services include: Performing sacerdotal functions, Conducting religious worship, and Controlling, conducting, and maintaining religious organizations (including the religious boards, societies, and other integral agencies of such organizations) that are under the authority of a religious body that is a church or denomination. 1040ez 2012 form You are considered to control, conduct, and maintain a religious organization if you direct, manage, or promote the organization's activities. 1040ez 2012 form A religious organization is under the authority of a religious body that is a church or denomination if it is organized for and dedicated to carrying out the principles of a faith according to the requirements governing the creation of institutions of the faith. 1040ez 2012 form Services for nonreligious organizations. 1040ez 2012 form   Your services for a nonreligious organization are ministerial services if the services are assigned or designated by your church. 1040ez 2012 form Assigned or designated services qualify even if they do not involve performing sacerdotal functions or conducting religious worship. 1040ez 2012 form   If your services are not assigned or designated by your church, they are ministerial services only if they involve performing sacerdotal functions or conducting religious worship. 1040ez 2012 form Services that are not part of your ministry. 1040ez 2012 form   Income from services you perform as an employee that are not ministerial services is subject to social security and Medicare tax withholding under FICA (not SECA) under the rules that apply to employees in general. 1040ez 2012 form The following are not ministerial services. 1040ez 2012 form Services you perform for nonreligious organizations other than the services stated above. 1040ez 2012 form Services you perform as a duly ordained, commissioned, or licensed minister of a church as an employee of the United States, the District of Columbia, a foreign government, or any of their political subdivisions. 1040ez 2012 form These services are not ministerial services even if you are performing sacerdotal functions or conducting religious worship. 1040ez 2012 form (For example, if you perform services as a chaplain in the Armed Forces of the United States, those services are not ministerial services. 1040ez 2012 form ) Services you perform in a government-owned and operated hospital. 1040ez 2012 form (These services are considered performed by a government employee, not by a minister as part of the ministry. 1040ez 2012 form ) However, services that you perform at a church-related hospital or health and welfare institution, or a private nonprofit hospital, are considered to be part of the ministry and are considered ministerial services. 1040ez 2012 form Books or articles. 1040ez 2012 form   Writing religious books or articles is considered to be in the exercise of your ministry and is considered a ministerial service. 1040ez 2012 form   This rule also applies to members of religious orders and to Christian Science practitioners and readers. 1040ez 2012 form Members of Religious Orders Services you perform as a member of a religious order in the exercise of duties required by the order are ministerial services. 1040ez 2012 form The services are considered ministerial because you perform them as an agent of the order. 1040ez 2012 form For example, if the order directs you to perform services for another agency of the supervising church or an associated institution, you are considered to perform the services as an agent of the order. 1040ez 2012 form However, if the order directs you to work outside the order, this employment will not be considered a duty required by the order unless: Your services are the kind that are ordinarily performed by members of the order, and Your services are part of the duties that must be exercised for, or on behalf of, the religious order as its agent. 1040ez 2012 form Effect of employee status. 1040ez 2012 form   Ordinarily, if your services are not considered directed or required of you by the order, you and the outside party for whom you work are considered employee and employer. 1040ez 2012 form In this case, your earnings from the services are taxed under the rules that apply to employees in general, not under the rules for services provided as agent for the order. 1040ez 2012 form This result is true even if you have taken a vow of poverty. 1040ez 2012 form Example. 1040ez 2012 form Pat Brown and Chris Green are members of a religious order and have taken vows of poverty. 1040ez 2012 form They renounce all claims to their earnings. 1040ez 2012 form The earnings belong to the order. 1040ez 2012 form Pat is a licensed attorney. 1040ez 2012 form The superiors of the order instructed her to get a job with a law firm. 1040ez 2012 form Pat joined a law firm as an employee and, as she requested, the firm made the salary payments directly to the order. 1040ez 2012 form Chris is a secretary. 1040ez 2012 form The superiors of the order instructed him to accept a job with the business office of the church that supervises the order. 1040ez 2012 form Chris took the job and gave all his earnings to the order. 1040ez 2012 form Pat's services are not duties required by the order. 1040ez 2012 form Her earnings are subject to social security and Medicare tax under FICA and to federal income tax. 1040ez 2012 form Chris' services are duties required by the order. 1040ez 2012 form He is acting as an agent of the order and not as an employee of a third party. 1040ez 2012 form He does not include the earnings in gross income, and they are not subject to income tax withholding or to social security and Medicare tax under FICA or SECA. 1040ez 2012 form Christian Science Practitioners and Readers Services you perform as a Christian Science practitioner or reader in the exercise of your profession are ministerial services. 1040ez 2012 form Amounts you receive for performing these services are generally subject to SE tax. 1040ez 2012 form You may request an exemption from SE tax, discussed next, which applies only to those services. 1040ez 2012 form Exemption From Self-Employment (SE) Tax You can request an exemption from SE tax if you are a member of the clergy (minister, member of a religious order, or Christian Science practitioner or reader) or a member of a recognized religious sect. 1040ez 2012 form Generally, members of religious orders who have taken a vow of poverty are already exempt from paying SE tax, as discussed earlier under Members of Religious Orders under Social Security Coverage. 1040ez 2012 form They do not have to request the exemption. 1040ez 2012 form Who cannot be exempt. 1040ez 2012 form   You cannot be exempt from SE tax if you made one of the following elections to be covered under social security. 1040ez 2012 form These elections are irrevocable. 1040ez 2012 form You elected to be covered under social security by filing Form 2031, Revocation of Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners, for your 1986, 1987, 2000, or 2001 tax year. 1040ez 2012 form You elected before 1968 to be covered under social security for your ministerial services. 1040ez 2012 form Requesting exemption. 1040ez 2012 form    Table 2, earlier, briefly summarizes the procedure for requesting exemption from the SE tax. 1040ez 2012 form More detailed explanations follow. 1040ez 2012 form If you are a minister, member of a religious order, or Christian Science practitioner, an approved exemption only applies to earnings you receive for ministerial services, discussed earlier. 1040ez 2012 form It does not apply to any other self-employment income. 1040ez 2012 form Table 2. 1040ez 2012 form The Self-Employment Tax Exemption Application and Approval Process   Who Can Apply Members of the Clergy Members of Recognized  Religious Sects How File Form 4361 File Form 4029 When File by the due date (including extensions) of your income tax return for the second tax year in which you had at least $400 of net earnings from self-employment (at least part from ministerial services) File anytime Approval If approved, you will receive an approved copy of Form 4361 If approved, you will receive an approved copy of Form 4029 Effective Date For all tax years after 1967 in which you have at least $400 of net earnings from self-employment For all tax years beginning with the first year you meet the eligibility requirements discussed later Members of the Clergy To claim the exemption from SE tax, you must meet all of the following conditions. 1040ez 2012 form You file Form 4361, described below under Requesting Exemption—Form 4361 . 1040ez 2012 form You are conscientiously opposed to public insurance because of your individual religious considerations (not because of your general conscience), or you are opposed because of the principles of your religious denomination. 1040ez 2012 form You file for other than economic reasons. 1040ez 2012 form You inform the ordaining, commissioning, or licensing body of your church or order that you are opposed to public insurance if you are a minister or a member of a religious order (other than a vow-of-poverty member). 1040ez 2012 form This requirement does not apply to Christian Science practitioners or readers. 1040ez 2012 form You establish that the organization that ordained, commissioned, or licensed you, or your religious order, is a tax-exempt religious organization. 1040ez 2012 form You establish that the organization is a church or a convention or association of churches. 1040ez 2012 form You did not make an election discussed earlier under Who cannot be exempt . 1040ez 2012 form You sign and return the statement the IRS mails to you to certify that you are requesting an exemption based on the grounds listed on the statement. 1040ez 2012 form Requesting Exemption—Form 4361 To request exemption from SE tax, file Form 4361 in triplicate (original and two copies) with the IRS. 1040ez 2012 form The IRS will return to you a copy of the Form 4361 that you filed indicating whether it has approved your exemption. 1040ez 2012 form If it is approved, keep the approved copy of Form 4361 in your permanent records. 1040ez 2012 form When to file. 1040ez 2012 form   File Form 4361 by the date your income tax return is due, including extensions, for the second tax year in which both of the following are true. 1040ez 2012 form You have net earnings from self-employment of at least $400. 1040ez 2012 form Any part of those net earnings was from ministerial services you performed as a: Minister, Member of a religious order, or Christian Science practitioner or reader. 1040ez 2012 form The 2 years do not have to be consecutive tax years. 1040ez 2012 form    The approval process can take some time, so you should file Form 4361 as soon as possible. 1040ez 2012 form Example 1. 1040ez 2012 form Rev. 1040ez 2012 form Lawrence Jaeger, a clergyman ordained in 2013, has net self-employment earnings as a minister of $450 in 2013 and $500 in 2014. 1040ez 2012 form He must file his application for exemption by the due date, including extensions, for his 2014 income tax return. 1040ez 2012 form However, if Rev. 1040ez 2012 form Jaeger does not receive IRS approval for an exemption by April 15, 2015, his SE tax for 2014 is due by that date. 1040ez 2012 form Example 2. 1040ez 2012 form Rev. 1040ez 2012 form Louise Wolfe has only $300 in net self-employment earnings as a minister in 2013, but earned more than $400 in 2012 and expects to earn more than $400 in 2014. 1040ez 2012 form She must file her application for exemption by the due date, including extensions, for her 2014 income tax return. 1040ez 2012 form However, if she does not receive IRS approval for an exemption by April 15, 2015, her SE tax for 2014 is due by that date. 1040ez 2012 form Example 3. 1040ez 2012 form In 2011, Rev. 1040ez 2012 form David Moss was ordained a minister and had $700 in net self-employment earnings as a minister. 1040ez 2012 form In 2012, he received $1,000 as a minister, but his related expenses were over $1,000. 1040ez 2012 form Therefore, he had no net self-employment earnings as a minister in 2012. 1040ez 2012 form Also in 2012, he opened a book store and had $8,000 in net self-employment earnings from the store. 1040ez 2012 form In 2013, he had net self-employment earnings of $1,500 as a minister and $10,000 net self-employment earnings from the store. 1040ez 2012 form Rev. 1040ez 2012 form Moss had net earnings from self-employment in 2011 and 2013 that were $400 or more each year, and part of the self-employment earnings in each of those years was for his services as a minister. 1040ez 2012 form Thus, he must file his application for exemption by the due date, including extensions, for his 2013 income tax return. 1040ez 2012 form Death of individual. 1040ez 2012 form   The right to file an application for exemption ends with an individual's death. 1040ez 2012 form A surviving spouse, executor, or administrator cannot file an exemption application for a deceased clergy member. 1040ez 2012 form Effective date of exemption. 1040ez 2012 form   An approved exemption is effective for all tax years after 1967 in which you have $400 or more of net earnings from self-employment and any part of those earnings is for services as a member of the clergy. 1040ez 2012 form Once the exemption is approved, it is irrevocable. 1040ez 2012 form Example. 1040ez 2012 form Rev. 1040ez 2012 form Trudy Austin, ordained in 2010, had $400 or more in net self-employment earnings as a minister in both 2010 and 2013. 1040ez 2012 form She files an application for exemption on February 20, 2014. 1040ez 2012 form If an exemption is granted, it is effective for 2010 and the following years. 1040ez 2012 form Refunds of SE tax. 1040ez 2012 form   If, after receiving an approved Form 4361, you find that you overpaid SE tax, you can file a claim for refund on Form 1040X. 1040ez 2012 form Generally, for a refund, you must file Form 1040X within 3 years from the date you filed the return or within 2 years from the date you paid the tax, whichever is later. 1040ez 2012 form A return you filed, or tax you paid, before the due date is considered to have been filed or paid on the due date. 1040ez 2012 form   If you file a claim after the 3-year period but within 2 years from the time you paid the tax, the credit or refund will not be more than the tax you paid within the 2 years immediately before you file the claim. 1040ez 2012 form Members of Recognized Religious Sects If you are a member of a recognized religious sect, or a division of a recognized religious sect, you can apply for an exemption from payment of social security and Medicare taxes on both your self-employment income and the wages you earn from an employer who also has an exemption. 1040ez 2012 form Exception. 1040ez 2012 form   If you received social security benefits or payments, or anyone else received these benefits or payments based on your wages or self-employment income, you cannot apply. 1040ez 2012 form However, if you pay your benefits back, you may be considered for exemption. 1040ez 2012 form Contact your local Social Security Administration office to find out the amount you must pay back. 1040ez 2012 form Eligibility requirements. 1040ez 2012 form   To claim this exemption from SE tax, all the following requirements must be met. 1040ez 2012 form You must file Form 4029, discussed later under Requesting Exemption—Form 4029 . 1040ez 2012 form As a follower of the established teachings of the sect or division, you must be conscientiously opposed to accepting benefits of any private or public insurance that makes payments for death, disability, old age, retirement, or medical care, or provides services for medical care. 1040ez 2012 form You must waive all rights to receive any social security payment or benefit and agree that no benefits or payments will be made to anyone else based on your wages and self-employment income. 1040ez 2012 form The Commissioner of Social Security must determine that: Your sect or division has the established teachings as described in (2) above, It is the practice, and has been for a substantial period of time, for members of the sect or division to provide for their dependent members in a manner that is reasonable in view of the members' general level of living, and The sect or division has existed at all times since December 31, 1950. 1040ez 2012 form Requesting Exemption—Form 4029 To request the exemption, file Form 4029 in triplicate (original and two copies) with the Social Security Administration at the address shown on the form. 1040ez 2012 form The sect or division must complete part of the form. 1040ez 2012 form The IRS will return to you a copy of the Form 4029 that you filed indicating whether it has approved your exemption. 1040ez 2012 form If it is approved, keep the approved copy of Form 4029 in your permanent records. 1040ez 2012 form When to file. 1040ez 2012 form   You can file Form 4029 at any time. 1040ez 2012 form   If you have an approved exemption from SE tax and for some reason that approved exemption ended, you must file a new Form 4029 if you subsequently meet the eligibility requirements, discussed earlier. 1040ez 2012 form See Effective date of exemption next for information on when the newly approved exemption would become effective. 1040ez 2012 form    If you have a previously approved exemption from SE tax and you change membership to another recognized religious sect, without any change to your eligibility requirements, then you do not need to file a new Form 4029. 1040ez 2012 form Effective date of exemption. 1040ez 2012 form   An approved exemption from SE tax generally is effective for all tax years beginning with the first year you meet the eligibility requirements discussed earlier. 1040ez 2012 form (For example, if you meet the eligibility requirements in 2011, you file Form 4029 in 2012, and the IRS approves your exemption in 2013, your exemption is effective for tax year 2011 and all later years. 1040ez 2012 form )   The exemption will end if you fail to meet the eligibility requirements or if the Commissioner of Social Security determines that the sect or division fails to meet them. 1040ez 2012 form You must notify the IRS within 60 days if you are no longer a member of the religious group, or if you no longer follow the established teachings of this group. 1040ez 2012 form The exemption will end for the tax year where you or your sect/division first fails to meet the eligibility requirements. 1040ez 2012 form Refunds of SE tax paid. 1040ez 2012 form    To get a refund of any SE tax you paid while the exemption was in effect, file Form 1040X. 1040ez 2012 form For information on filing this form, see Refunds of SE tax under Requesting Exemption—Form 4361, earlier. 1040ez 2012 form Exemption From FICA Taxes Generally, under FICA, the employer and the employee each pay half of the social security and Medicare tax. 1040ez 2012 form Both the employee and the employer, if they meet the eligibility requirements discussed earlier, can apply to be exempt from their share of FICA taxes on wages paid by the employer to the employee. 1040ez 2012 form A partnership in which each partner holds a religious exemption from social security and Medicare is an employer for this purpose. 1040ez 2012 form If the employer's application is approved, the exemption will apply only to FICA taxes on wages paid to employees who also received an approval of identical applications. 1040ez 2012 form Information for employers. 1040ez 2012 form   If you have an approved Form 4029 and you have an employee who has an approved Form 4029, do not report wages you paid to the employee as social security and Medicare wages. 1040ez 2012 form   If you have an employee who does not have an approved Form 4029, you must withhold the employee's share of social security and Medicare taxes and pay the employer's share. 1040ez 2012 form Form W-2. 1040ez 2012 form   When preparing a Form W-2 for an employee with an approved Form 4029, enter “Form 4029” in box 14, “Other. 1040ez 2012 form ” Do not make any entries in boxes 3, 4, 5, or 6. 1040ez 2012 form Forms 941, 943, and 944. 1040ez 2012 form   If both you and your employee have received approved Forms 4029, do not include these exempt wages on the following forms. 1040ez 2012 form Instead, follow the instructions given below. 1040ez 2012 form Form 941, Employer's QUARTERLY Federal Tax Return: check the box on line 4 and enter “Form 4029” in the empty space below the check box. 1040ez 2012 form Form 943, Employer's Annual Federal Tax Return for Agricultural Employees: enter “Form 4029” on the dotted line next to the lines 2 and 4 entry spaces. 1040ez 2012 form Form 944, Employer's ANNUAL Federal Tax Return: check the box on line 3 and enter “Form 4029” in the empty space below the check box. 1040ez 2012 form Effective date. 1040ez 2012 form   An approved exemption from FICA becomes effective on the first day of the first calendar quarter after the quarter in which you file Form 4029. 1040ez 2012 form The exemption will end on the last day of the calendar quarter before the quarter in which the employer, employee, sect, or division fails to meet the requirements. 1040ez 2012 form Self-Employment Tax: Figuring Net Earnings There are two methods for figuring your net earnings from self-employment as a member of the clergy or a religious worker. 1040ez 2012 form Regular method. 1040ez 2012 form Nonfarm optional method. 1040ez 2012 form You may find Worksheets 1 through 4 helpful in figuring your net earnings from self-employment. 1040ez 2012 form Blank worksheets are in the back of this publication, after the Comprehensive Example. 1040ez 2012 form Regular Method Most people use the regular method. 1040ez 2012 form Under this method, figure your net earnings from self-employment by totaling your gross income for services you performed as a minister, a member of a religious order who has not taken a vow of poverty, or a Christian Science practitioner or reader. 1040ez 2012 form Then, subtract your allowable business deductions and multiply the difference by 92. 1040ez 2012 form 35% (. 1040ez 2012 form 9235). 1040ez 2012 form Use Schedule SE (Form 1040) to figure your net earnings and SE tax. 1040ez 2012 form If you are an employee of a church that elected to exclude you from FICA coverage, figure net earnings by multiplying your church wages shown on Form W-2 by 92. 1040ez 2012 form 35% (. 1040ez 2012 form 9235). 1040ez 2012 form Do not reduce your wages by any business deductions when making this computation. 1040ez 2012 form Use Schedule SE (Form 1040), Section B, to figure your net earnings and SE tax. 1040ez 2012 form If you have an approved exemption, or you are automatically exempt, do not include the income or deductions from ministerial services in figuring your net earnings from self-employment. 1040ez 2012 form Amounts included in gross income. 1040ez 2012 form   To figure your net earnings from self-employment (on Schedule SE (Form 1040)), include in gross income: Salaries and fees for your ministerial services (discussed earlier), Offerings you receive for marriages, baptisms, funerals, masses, etc. 1040ez 2012 form , The value of meals and lodging provided to you, your spouse, and your dependents for your employer's convenience, The fair rental value of a parsonage provided to you (including the cost of utilities that are furnished) and the rental allowance (including an amount for payment of utilities) paid to you, and Any amount a church pays toward your income tax or SE tax, other than withholding the amount from your salary. 1040ez 2012 form This amount is also subject to income tax. 1040ez 2012 form   For the income tax treatment of items (2) and (4), see Income Tax: Income and Expenses , later. 1040ez 2012 form Example. 1040ez 2012 form Pastor Roger Adams receives an annual salary of $39,000 as a full-time minister. 1040ez 2012 form The $39,000 includes $5,000 that is designated as a rental allowance to pay utilities. 1040ez 2012 form His church owns a parsonage that has a fair rental value of $12,000 per year. 1040ez 2012 form The church gives Pastor Adams the use of the parsonage. 1040ez 2012 form He is not exempt from SE tax. 1040ez 2012 form He must include $51,000 ($39,000 plus $12,000) when figuring his net earnings for SE tax purposes. 1040ez 2012 form The results would be the same if, instead of the use of the parsonage and receipt of the rental allowance for utilities, Pastor Adams had received an annual salary of $51,000 of which $17,000 ($5,000 plus $12,000) per year was designated as a rental allowance. 1040ez 2012 form Overseas duty. 1040ez 2012 form   Your net earnings from self-employment are determined without any foreign earned income exclusion or the foreign housing exclusion or deduction if you are a U. 1040ez 2012 form S. 1040ez 2012 form citizen or resident alien serving abroad and living in a foreign country. 1040ez 2012 form   For information on excluding foreign earned income or the foreign housing amount, see Publication 54. 1040ez 2012 form Example. 1040ez 2012 form Diane Jones was the minister of a U. 1040ez 2012 form S. 1040ez 2012 form church in Mexico. 1040ez 2012 form She earned $35,000 in that position and was able to exclude it all for income tax purposes under the foreign earned income exclusion. 1040ez 2012 form The United States does not have a social security agreement with Mexico, so Mrs. 1040ez 2012 form Jones is subject to U. 1040ez 2012 form S. 1040ez 2012 form SE tax and must include $35,000 when figuring net earnings from self-employment. 1040ez 2012 form Specified U. 1040ez 2012 form S. 1040ez 2012 form possessions. 1040ez 2012 form    The exclusion from gross income for amounts derived from American Samoa or Puerto Rico does not apply in computing net earnings from self-employment. 1040ez 2012 form Also see Residents of Puerto Rico, the U. 1040ez 2012 form S. 1040ez 2012 form Virgin Islands, Guam, the CNMI, and American Samoa , earlier, under U. 1040ez 2012 form S. 1040ez 2012 form Citizens and Resident and Nonresident Aliens. 1040ez 2012 form Amounts not included in gross income. 1040ez 2012 form   Do not include the following amounts in gross income when figuring your net earnings from self-employment. 1040ez 2012 form Offerings that others made to the church. 1040ez 2012 form Contributions by your church to a tax-sheltered annuity plan set up for you, including any salary reduction contributions (elective deferrals) that are not included in your gross income. 1040ez 2012 form Pension payments or retirement allowances you receive for your past ministerial services. 1040ez 2012 form The rental value of a parsonage or a parsonage allowance provided to you after you retire. 1040ez 2012 form Allowable deductions. 1040ez 2012 form   When figuring your net earnings from self-employment, deduct all your expenses related to your ministerial services performed as a self-employed person. 1040ez 2012 form These are ministerial expenses you incurred while working other than as a common-law employee of the church. 1040ez 2012 form They include expenses incurred in performing marriages and baptisms, and in delivering speeches. 1040ez 2012 form Deduct these expenses on Schedule C or C-EZ (Form 1040), and carry the net amount to line 2 of Schedule SE (Form 1040), Section A or B. 1040ez 2012 form   Wages earned as a common-law employee (explained earlier) of a church are generally subject to self-employment tax unless an exemption is requested, as discussed earlier under Exemption From Self-Employment (SE) Tax . 1040ez 2012 form Subtract any allowable expenses (including unreimbursed employee business expenses) from those wages, include the net amount on line 2 of Schedule SE (Form 1040), Section A or B, and attach an explanation. 1040ez 2012 form Do not complete Schedule C or C-EZ (Form 1040). 1040ez 2012 form However, for income tax purposes, the expenses are allowed only as an itemized deduction on Schedule A (Form 1040) to the extent they exceed 2% of adjusted gross income. 1040ez 2012 form Employee reimbursement arrangements. 1040ez 2012 form   If you received an advance, allowance, or reimbursement for your employee expenses, how you report this amount and your employee expenses depends on whether your employer reimbursed you under an accountable plan or a nonaccountable plan. 1040ez 2012 form Ask your employer if you are not sure if it reimburses you using an accountable or a nonaccountable plan. 1040ez 2012 form Accountable plans. 1040ez 2012 form   To be an accountable plan, your employer's reimbursement arrangement must include all three of the following rules. 1040ez 2012 form Your expenses must have a business connection—that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. 1040ez 2012 form You must adequately account to your employer for these expenses within a reasonable period of time. 1040ez 2012 form You must return any excess reimbursement or allowance within a reasonable period of time. 1040ez 2012 form   The reimbursement is not reported on your Form W-2. 1040ez 2012 form Generally, if your expenses equal your reimbursement, you have no deduction. 1040ez 2012 form If your expenses are more than your reimbursement, you can deduct your excess expenses for SE tax and income tax purposes. 1040ez 2012 form Nonaccountable plan. 1040ez 2012 form   A nonaccountable plan is a reimbursement arrangement that does not meet all three of the rules listed under Accountable plans above. 1040ez 2012 form In addition, even if your employer has an accountable plan, the following payments will be treated as being paid under a nonaccountable plan. 1040ez 2012 form Excess reimbursements you fail to return to your employer. 1040ez 2012 form Reimbursement of nondeductible expenses related to your employer's business. 1040ez 2012 form   Your employer will combine any reimbursement paid to you under a nonaccountable plan with your wages, salary, or other compensation and report the combined total in box 1 of your Form W-2. 1040ez 2012 form Since reimbursements under a nonaccountable plan are included in your gross income, you can deduct your related expenses (for SE tax and income tax purposes) regardless of whether they are more than, less than, or equal to your reimbursement. 1040ez 2012 form   For more information on accountable and nonaccountable plans, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. 1040ez 2012 form Married Couple Missionary Team If both spouses are duly ordained, commissioned, or licensed ministers of a church and have an agreement that each will perform specific services for which they are paid jointly or separately, they must divide the self-employment income according to the agreement. 1040ez 2012 form If the agreement is with one spouse only and the other spouse is not paid for any specific duties, amounts received for their services are included only in the self-employment income of the spouse having the agreement. 1040ez 2012 form Earnings Subject to SE Tax For 2013, the maximum net earnings from self-employment subject to social security (old age, survivors, and disability insurance) tax is $113,700 minus any wages and tips you earned that were subject to social security tax. 1040ez 2012 form The tax rate for the social security part is 12. 1040ez 2012 form 4%. 1040ez 2012 form In addition, all of your net earnings are subject to the Medicare (hospital insurance) part of the SE tax. 1040ez 2012 form This tax rate is 2. 1040ez 2012 form 9%. 1040ez 2012 form The combined self-employment tax rate is 15. 1040ez 2012 form 3%. 1040ez 2012 form Additional Medicare Tax. 1040ez 2012 form   Beginning in 2013, a 0. 1040ez 2012 form 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. 1040ez 2012 form Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 1040ez 2012 form A self-employment loss is not considered for purposes of this tax. 1040ez 2012 form RRTA compensation is separately compared to the threshold. 1040ez 2012 form For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 1040ez 2012 form Nonfarm Optional Method You may be able to use the nonfarm optional method for figuring your net earnings from self-employment. 1040ez 2012 form In general, the nonfarm optional method is intended to permit continued coverage for social security and Medicare purposes when your income for the tax year is low. 1040ez 2012 form You may use the nonfarm optional method if you meet all the following tests. 1040ez 2012 form You are self-employed on a regular basis. 1040ez 2012 form You meet this test if your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. 1040ez 2012 form The net earnings can be from either farm or nonfarm earnings or both. 1040ez 2012 form You have used this method less than 5 prior years. 1040ez 2012 form (There is a 5-year lifetime limit. 1040ez 2012 form ) The years do not have to be consecutive. 1040ez 2012 form Your net nonfarm profits were: Less than $5,024, and Less than 72. 1040ez 2012 form 189% of your gross nonfarm income. 1040ez 2012 form If you meet all three tests, use Table 3 to figure your net earnings from self-employment under the nonfarm optional method. 1040ez 2012 form Table 3. 1040ez 2012 form Figuring Nonfarm Net Earnings IF your gross nonfarm income is . 1040ez 2012 form . 1040ez 2012 form . 1040ez 2012 form THEN your net earnings are equal to . 1040ez 2012 form . 1040ez 2012 form . 1040ez 2012 form $6,960 or less Two-thirds of your gross nonfarm income. 1040ez 2012 form More than $6,960 $4,640. 1040ez 2012 form Actual net earnings. 1040ez 2012 form   Multiply your total earnings subject to SE tax by 92. 1040ez 2012 form 35% (. 1040ez 2012 form 9235) to get actual net earnings. 1040ez 2012 form Actual net earnings are equivalent to net earnings under the “Regular Method. 1040ez 2012 form ” More information. 1040ez 2012 form   For more information on the nonfarm optional method, see Publication 334, Tax Guide for Small Business, and the Schedule SE (Form 1040) instructions. 1040ez 2012 form Income Tax: Income and Expenses Some income and expense items are treated the same for both income tax and SE tax purposes and some are treated differently. 1040ez 2012 form Note. 1040ez 2012 form For purposes of this section, references to members of the clergy are only to ministers or members of a religious order. 1040ez 2012 form Income Items The tax treatment of offerings and fees, outside earnings, rental allowances, rental value of a parsonage, earnings of members of religious orders, and foreign earned income is discussed here. 1040ez 2012 form Offerings and Fees If you are a member of the clergy, you must include in your income offerings and fees you receive for marriages, baptisms, funerals, masses, etc. 1040ez 2012 form , in addition to your salary. 1040ez 2012 form If the offering is made to the religious institution, it is not taxable to you. 1040ez 2012 form Outside Earnings If you are a member of a religious organization and you give your outside earnings to the organization, you still must include the earnings in your income. 1040ez 2012 form However, you may be entitled to a charitable contribution deduction for the amount paid to the organization. 1040ez 2012 form For more information, see Publication 526. 1040ez 2012 form Exclusion of Rental Allowance and Fair Rental Value of a Parsonage Ordained, commissioned, or licensed ministers of the gospel may be able to exclude from income tax the rental allowance or fair rental value of a parsonage that is provided to them as pay for their services. 1040ez 2012 form Services include: Ministerial services, discussed earlier, Administrative duties and teaching at theological seminaries, and The ordinary duties of a minister performed as an employee of the United States (other than as a chaplain in the Armed Forces), a state, possession, political subdivision, or the District of Columbia. 1040ez 2012 form This exclusion applies only for income tax purposes. 1040ez 2012 form It does not apply for SE tax purposes, as discussed earlier under Amounts included in gross income under Self-Employment Tax: Figuring Net Earnings. 1040ez 2012 form Designation requirement. 1040ez 2012 form   The church or organization that employs you must officially designate the payment as a housing allowance before it makes the payment. 1040ez 2012 form It must designate a definite amount. 1040ez 2012 form It cannot determine the amount of the housing allowance at a later date. 1040ez 2012 form If the church or organization does not officially designate a definite amount as a housing allowance, you must include your total salary in your income. 1040ez 2012 form   If you are employed and paid by a local congregation, a resolution by a national church agency of your denomination does not effectively designate a housing allowance for you. 1040ez 2012 form The local congregation must officially designate the part of your salary that is a housing allowance. 1040ez 2012 form However, a resolution of a national church agency can designate your housing allowance if you are directly employed by the national agency. 1040ez 2012 form Rental allowances. 1040ez 2012 form   If you receive in your salary an amount officially designated as a rental allowance (including an amount to pay utility costs), you can exclude the allowance from your gross income if: You use the amount to provide or rent a home, and The amount is not more than reasonable pay for your services. 1040ez 2012 form   The amount you exclude cannot be more than the fair rental value of the home, including furnishings, plus the cost of utilities. 1040ez 2012 form Fair rental value of parsonage. 1040ez 2012 form   You can exclude from gross income the fair rental value of a house or parsonage, including utilities, furnished to you as part of your earnings. 1040ez 2012 form However, the exclusion cannot be more than the reasonable pay for your services. 1040ez 2012 form If you pay for the utilities, you can exclude any allowance designated for utility costs, up to your actual cost. 1040ez 2012 form Example. 1040ez 2012 form Rev. 1040ez 2012 form Joanna Baker is a full-time minister. 1040ez 2012 form The church allows her to use a parsonage that has an annual fair rental value of $24,000. 1040ez 2012 form The church pays her an annual salary of $67,000, of which $7,500 is designated for utility costs. 1040ez 2012 form Her actual utility costs during the year were $7,000. 1040ez 2012 form For income tax purposes, Rev. 1040ez 2012 form Baker excludes $31,000 from gross income ($24,000 fair rental value of the parsonage plus $7,000 from the allowance for utility costs). 1040ez 2012 form She will report $60,000 ($59,500 salary plus $500 of unused utility allowance). 1040ez 2012 form Her income for SE tax purposes, however, is $91,000 ($67,000 salary + $24,000 fair rental value of the parsonage). 1040ez 2012 form Home ownership. 1040ez 2012 form   If you own your home and you receive as part of your salary a housing or rental allowance, you may exclude from gross income the smallest of: The amount actually used to provide a home, The amount officially designated as a rental allowance, or The fair rental value of the home, including furnishings, utilities, garage, etc. 1040ez 2012 form Excess rental allowance. 1040ez 2012 form   You must include in gross income the amount of any rental allowance that is more than the smallest of: Your reasonable salary, The fair rental value of the home plus utilities, or The amount actually used to provide a home. 1040ez 2012 form   Include in the total on Form 1040, line 7. 1040ez 2012 form On the dotted line next to line 7, enter “Excess allowance” and the amount. 1040ez 2012 form You may deduct the home mortgage interest and real estate taxes paid on your home even though you pay all or part of those expenses with funds you get through a tax-free rental or parsonage allowance. 1040ez 2012 form However, you can only deduct these expenses as itemized deductions on Schedule A (Form 1040). 1040ez 2012 form Retired ministers. 1040ez 2012 form   If you are a retired minister, you can exclude from your gross income the rental value of a home (plus utilities) furnished to you by your church as a part of your pay for past services, or the part of your pension that was designated as a rental allowance. 1040ez 2012 form However, a minister's surviving spouse cannot exclude the rental value unless the rental value is for ministerial services he or she performs or performed. 1040ez 2012 form Teachers or administrators. 1040ez 2012 form   If you are a minister employed as a teacher or administrator by a church school, college, or university, you are performing ministerial services for purposes of the housing exclusion. 1040ez 2012 form However, if you perform services as a teacher or administrator on the faculty of a nonchurch college, you cannot exclude from your income a housing allowance or the value of a home that the college provides to you. 1040ez 2012 form    If you live in faculty lodging as an employee of an educational institution or academic health center, all or part of the value of that lodging may be nontaxable under a different rule. 1040ez 2012 form In Publication 525, see Faculty lodging in the discussion on meals and lodging under Fringe Benefits. 1040ez 2012 form   If you serve as a minister of music or minister of education, or serve in an administrative or other function of your religious organization, but are not authorized to perform substantially all of the religious duties of an ordained minister in your church (even if you are commissioned as a minister of the gospel), the housing exclusion does not apply to you. 1040ez 2012 form Theological students. 1040ez 2012 form   If you are a theological student serving a required internship as a part-time or assistant pastor, you cannot exclude a parsonage or rental allowance from your income unless you are ordained, commissioned, or licensed as a minister. 1040ez 2012 form Traveling evangelists. 1040ez 2012 form   You can exclude a designated rental allowance from out-of-town churches if you meet all of the following requirements. 1040ez 2012 form You are an ordained minister. 1040ez 2012 form You perform ministerial services at churches located away from your community. 1040ez 2012 form You actually use the rental allowance to maintain your permanent home. 1040ez 2012 form Cantors. 1040ez 2012 form   If you have a bona fide commission and your congregation employs you on a full-time basis to perform substantially all the religious functions of the Jewish faith, you can exclude a rental allowance from your gross income. 1040ez 2012 form Earnings—Members of Religious Orders Your earnings may be exempt from both income tax and SE tax if you are a member of a religious order who: Has taken a vow of poverty, Receives earnings for services performed as an agent of the order and in the exercise of duties required by the order, and Renounces the earnings and gives them to the order. 1040ez 2012 form See Members of Religious Orders , earlier, under Social Security Coverage. 1040ez 2012 form Foreign Earned Income Certain income may be exempt from income tax if you work in a foreign country or in a specified U. 1040ez 2012 form S. 1040ez 2012 form possession. 1040ez 2012 form Publication 54 discusses the foreign earned income exclusion. 1040ez 2012 form Publication 570, Tax Guide for Individuals With Income From U. 1040ez 2012 form S. 1040ez 2012 form Possessions, covers the rules for taxpayers with income from U. 1040ez 2012 form S. 1040ez 2012 form possessions. 1040ez 2012 form You can get these free publications from the Internal Revenue Service at IRS. 1040ez 2012 form gov or from most U. 1040ez 2012 form S. 1040ez 2012 form Embassies or consulates. 1040ez 2012 form Expense Items The tax treatment of ministerial trade or business expenses, expenses allocable to tax-free income, and health insurance costs is discussed here. 1040ez 2012 form Ministerial Trade or Business Expenses as an Employee When you figure your income tax, you must itemize your deductions on Schedule A (Form 1040) to claim allowable deductions for ministerial trade or business expenses incurred while working as an employee. 1040ez 2012 form You also may have to file Form 2106, Employee Business Expenses (or Form 2106-EZ, Unreimbursed Employee Business Expenses). 1040ez 2012 form You claim these expenses as miscellaneous itemized deductions that are subject to the 2%-of-adjusted-gross-income (AGI) limit. 1040ez 2012 form See Publication 529 for more information on this limit. 1040ez 2012 form However, you cannot deduct any of your employee business expenses that are allocable to tax-free income (discussed next). 1040ez 2012 form Expenses Allocable to Tax-Free Income If you receive a rental or parsonage allowance that is exempt from income tax (tax free), you must allocate a portion of the expenses of operating your ministry to that tax-free income. 1040ez 2012 form You cannot deduct the portion of your expenses that you allocate to your tax-free rental or parsonage allowance. 1040ez 2012 form Exception. 1040ez 2012 form   This rule does not apply to your deductions for home mortgage interest or real estate taxes on your home. 1040ez 2012 form Figuring the allocation. 1040ez 2012 form   Figure the portion of your otherwise deductible expenses that you cannot deduct (because you must allocate that portion to tax-free income) by multiplying the expenses by the following fraction:      Tax-free rental or parsonage allowance     All income (taxable and tax free) earned from your ministry           When figuring the allocation, include the income and expenses related to the ministerial duties you perform both as an employee and as a self-employed person. 1040ez 2012 form    Reduce your otherwise deductible expenses only in figuring your income tax, not your SE tax. 1040ez 2012 form Example. 1040ez 2012 form Rev. 1040ez 2012 form Charles Ashford received $40,000 in earnings for ministerial services consisting of a $28,000 salary for ministerial services performed as an employee, $2,000 for weddings and baptisms performed as a self-employed person, and a $10,000 tax-free parsonage allowance. 1040ez 2012 form He incurred $4,000 of unreimbursed expenses connected with his earnings for ministerial services. 1040ez 2012 form $3,500 of the $4,000 is for employee expenses related to his ministerial salary, and $500 is related to the weddings and baptisms he performed as a self-employed person. 1040ez 2012 form Rev. 1040ez 2012 form Ashford figures the nondeductible (tax-free) portion of expenses related to his ministerial salary as follows: ($10,000 ÷ $40,000) x $3,500 = $875   Rev. 1040ez 2012 form Ashford figures the nondeductible (tax-free) portion of expenses related to his wedding and baptism income as follows: ($10,000 ÷ $40,000) x $500 = $125 Required statement. 1040ez 2012 form   If you receive a tax-free rental or parsonage allowance and have ministerial expenses, attach a statement to your tax return. 1040ez 2012 form The statement must contain all of the following information. 1040ez 2012 form A list of each item of taxable ministerial income by source (such as wages, salary, weddings, baptisms, etc. 1040ez 2012 form ) plus the amount. 1040ez 2012 form A list of each item of tax-free ministerial income by source (parsonage allowance) plus the amount. 1040ez 2012 form A list of each item of otherwise deductible ministerial expenses plus the amount. 1040ez 2012 form How you figured the nondeductible part of your otherwise deductible expenses. 1040ez 2012 form A statement that the other deductions claimed on your tax return are not allocable to your tax-free income. 1040ez 2012 form   See the attachments prepared for the Comprehensive Example , later. 1040ez 2012 form Following the example, you will find blank worksheets for your own use. 1040ez 2012 form Health Insurance Costs of Self-Employed Ministers If you are self-employed, you may be able to deduct the amount you paid in 2013 for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents. 1040ez 2012 form If you qualify, you can take this deduction as an adjustment to income on Form 1040, line 29. 1040ez 2012 form See the Instructions for Form 1040 to figure your deduction. 1040ez 2012 form The following special rules apply to the self-employed health insurance deduction. 1040ez 2012 form You cannot take a medical expense deduction on Schedule A (Form 1040) for any expenses you claim for purposes of the self-employed health insurance deduction. 1040ez 2012 form You cannot take the deduction for any month you are eligible to participate in a subsidized plan of your (or your spouse's) employer. 1040ez 2012 form The deduction cannot exceed your net earnings from the business under which the insurance plan is established. 1040ez 2012 form Your net earnings under this rule do not include the income you earned as a common-law employee (discussed earlier) of a church. 1040ez 2012 form More information. 1040ez 2012 form   For more information about the self-employed health insurance deduction, see chapter 6 in Publication 535. 1040ez 2012 form Deduction for SE Tax You can deduct one-half of your SE tax in figuring adjusted gross income. 1040ez 2012 form This is an income tax deduction only, on Form 1040, line 27. 1040ez 2012 form Do not claim this deduction in figuring net earnings from self-employment subject to SE tax. 1040ez 2012 form Income Tax Withholding and Estimated Tax The federal income tax is a pay-as-you-go tax. 1040ez 2012 form You must pay the tax as you earn or receive income during the year. 1040ez 2012 form An employee usually has income tax withheld from his or her wages or salary. 1040ez 2012 form However, your salary is not subject to federal income tax withholding if both of the following conditions apply. 1040ez 2012 form You are a duly ordained, commissioned, or licensed minister, a member of a religious order (who has not taken a vow of poverty), or a Christian Science practitioner or reader. 1040ez 2012 form Your salary is for ministerial services (see Ministerial Services , earlier). 1040ez 2012 form If your salary is not subject to withholding, or if you do not pay enough tax through withholding, you may need to make estimated tax payments to avoid penalties for not paying enough tax as you earn your income. 1040ez 2012 form You generally must make estimated tax payments if you expect to owe taxes, including SE tax, of $1,000 or more, when you file your return. 1040ez 2012 form Determine your estimated tax by using the worksheets in Publication 505, Tax Withholding and Estimated Tax. 1040ez 2012 form Pay the entire estimated tax for 2014 or the first installment by April 15, 2014. 1040ez 2012 form See Form 1040-ES for the different payment methods. 1040ez 2012 form The April 15 date applies whether or not your tax home and your abode are outside the United States and Puerto Rico. 1040ez 2012 form For more information, see chapter 2 of Publication 505. 1040ez 2012 form If you perform your services as a common-law employee of the church and your salary is not subject to income tax withholding, you can enter into a voluntary withholding agreement with the church to cover any income and SE tax that may be due. 1040ez 2012 form Filing Your Return You must file an income tax return for 2013 if your gross income was at least the amount shown in the third column of Table 4 above. 1040ez 2012 form Table 4. 1040ez 2012 form 2013 Filing Requirements for Most Taxpayers IF your filing status is . 1040ez 2012 form . 1040ez 2012 form . 1040ez 2012 form AND at the end of 2013 you were* . 1040ez 2012 form . 1040ez 2012 form . 1040ez 2012 form THEN file a return if your gross income** was at least . 1040ez 2012 form . 1040ez 2012 form . 1040ez 2012 form single under age 65 65 or older   $10,000 $11,500   married filing jointly*** under 65 (both spouses) 65 or older (one spouse) 65 or older (both spouses)   $20,000  $21,200  $22,400   married filing separately any age   $3,900   head of household under 65 65 or older   $12,850 $14,350   qualifying widow(er) with dependent child under 65 65 or older   $16,100  $17,300   * If you were born on January 1, 1949, you are considered to be age 65 at the end of 2013. 1040ez 2012 form ** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). 1040ez 2012 form Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2013, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). 1040ez 2012 form If (a) or (b) applies, see the instructions for Form 1040, lines 20a and 20b, to figure the taxable part of social security benefits you must include in gross income. 1040ez 2012 form Gross income includes gains, but not losses, reported on Form 8949 or Schedule D (Form 1040). 1040ez 2012 form Gross income from a business means, for example, the amount on Schedule C (Form 1040), line 7, or Schedule F (Form 1040), line 9. 1040ez 2012 form But, in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C (Form 1040), line 7, or Schedule F (Form 1040), line 9. 1040ez 2012 form *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900, you must file a return regardless of your age. 1040ez 2012 form Additional requirements. 1040ez 2012 form   Even if your income was less than the amount shown in Table 4, you must file an income tax return on Form 1040, and attach a completed Schedule SE (Form 1040), if:    You are not exempt from SE tax, and you have net earnings from self-employment (discussed earlier under Self-Employment Tax: Figuring Net Earnings ) of $400 or more in the tax year, You are exempt from SE tax on earnings from ministerial services and you have $400 or more of other net earnings subject to SE tax, or You had wages of $108. 1040ez 2012 form 28 or more from an electing church or church-controlled organization (see Coverage of Religious Workers (Church Employees) , earlier, under Social Security Coverage). 1040ez 2012 form Self-employment tax. 1040ez 2012 form   If you are liable for SE tax, you must file Schedule SE (Form 1040) with your return. 1040ez 2012 form   If you filed Form 4361 and did not receive approval from the IRS, you must pay SE tax on your ministerial earnings, as explained earlier. 1040ez 2012 form You should report ministerial earnings and expenses from nonemployee ministerial services on Schedule C or C-EZ (Form 1040). 1040ez 2012 form You should then carry the net amount over to line 2 of Schedule SE (Form 1040), Section A or B. 1040ez 2012 form However, if you were a duly ordained minister who was an employee of a church and you must pay SE tax on the wages you earned for those services, do not report those wages on Schedule C or C-EZ (Form 1040). 1040ez 2012 form Instead, report those wages less any allowable expenses (including any unreimbursed employee business expenses), on line 2 of Schedule SE (Form 1040), Section A or B, and attach an explanation. 1040ez 2012 form Note. 1040ez 2012 form For income tax purposes, the unreimbursed employee business expenses that you incurred as an employee of the church and subtracted from your wages on line 2 of Schedule SE (Form 1040) are allowed only as an itemized deduction on Schedule A (Form 1040) if they exceed 2% of your adjusted gross income. 1040ez 2012 form You cannot deduct these expenses on Schedule C or C-EZ (Form 1040) as a trade or business expense. 1040ez 2012 form Exemption from SE tax. 1040ez 2012 form   If you filed Form 4361 and received IRS approval not to be taxed on your ministerial earnings, and you do not have any other income subject to SE tax, do not file Schedule SE (Form 1040). 1040ez 2012 form Instead, enter “Exempt—Form 4361” on the dotted line next to Form 1040, line 56. 1040ez 2012 form However, if you had net earnings from another trade or business of $400 or more subject to SE tax, see line A at the top of Schedule SE (Form 1040), Section B. 1040ez 2012 form    If you filed Form 4029 and received IRS approval not to be taxed on those earnings, and you do not have any other income subject to SE tax, do not file Schedule SE (Form 1040). 1040ez 2012 form Instead, enter “Exempt—Form 4029” on the dotted line next to Form 1040, line 56. 1040ez 2012 form More information. 1040ez 2012 form   For more information on filing your return, including when and where to file it, see the Instructions for Form 1040. 1040ez 2012 form Retirement Savings Arrangements Retirement savings arrangements are plans that offer you a tax-favored way to save for your retirement. 1040ez 2012 form You generally can deduct your contributions to the plan. 1040ez 2012 form Your contributions and the earnings on them are not taxed until they are distributed. 1040ez 2012 form Retirement plans for the self-employed. 1040ez 2012 form   To set up one of the following plans you must be self-employed. 1040ez 2012 form SEP (simplified employee pension) plan. 1040ez 2012 form SIMPLE (savings incentive match plan for employees) plan. 1040ez 2012 form Qualified retirement plan (also called a Keogh or H. 1040ez 2012 form R. 1040ez 2012 form 10 plan). 1040ez 2012 form   The common-law rules determine whether you are an employee or a self-employed person for purposes of setting up a retirement plan. 1040ez 2012 form See Employment status for other tax purposes under Coverage of Members of the Clergy, earlier. 1040ez 2012 form This result is true even if your compensation for ministerial services (defined earlier) is subject to SE tax. 1040ez 2012 form   For example, if a congregation pays you a salary for performing ministerial services and you are subject to the congregation's control, you generally are a common-law employee. 1040ez 2012 form You are not a self-employed person for purposes of setting up a retirement plan. 1040ez 2012 form This result is true even if your salary is subject to SE tax. 1040ez 2012 form   On the other hand, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal services that you report on Schedule C or C-EZ (Form 1040), are earnings from self-employment for all tax purposes. 1040ez 2012 form   For more information on establishing a SEP, SIMPLE, or qualified retirement plan, see Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans). 1040ez 2012 form Individual retirement arrangements (IRAs). 1040ez 2012 form   The traditional IRA and the Roth IRA are two individual retirement arrangements you can use to save money for your retirement. 1040ez 2012 form Generally, your maximum contribution for 2013 to either of these plans (or to a combination of the two) is the smaller of your taxable compensation or $5,500 ($6,500 if you are age 50 or older). 1040ez 2012 form   However, your maximum contribution to a Roth IRA will be further reduced or eliminated if your adjusted gross income is above a certain amount. 1040ez 2012 form You cannot deduct Roth IRA contributions, but if you satisfy certain requirements, all earnings in the Roth IRA are tax free and neither your nondeductible contributions nor any earnings on them are taxable when distributed. 1040ez 2012 form   If you contribute to a traditional IRA, your contribution may be deductible. 1040ez 2012 form However, your deduction may be reduced or eliminated if you or your spouse is covered by an employer retirement plan (including, but not limited to, a SEP, SIMPLE, or qualified retirement plan). 1040ez 2012 form   For more information on IRAs, see Publication 590. 1040ez 2012 form Tax-sheltered annuity plans. 1040ez 2012 form   Church employees, members of religious orders, and duly ordained, commissioned, or licensed ministers working as ministers or chaplains can participate in tax-sheltered annuity (403(b)) plans. 1040ez 2012 form For more
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Understanding Your CP3219B Notice

This Statutory Notice of Deficiency notifies you of the IRS’s intent to assess a tax deficiency and informs you of your right to petition the United States Tax Court to dispute the proposed adjustments.


What you need to do immediately

  • Review this notice and compare our changes to the information on your tax return. On previous notices we asked you to verify the income, credits, and deductions reported on your tax return because they’re different from the information we received from other sources. You didn't provide any further information to us.
  • If you agree with the changes, complete the Form 4089, Notice of Deficiency - Waiver, sign and return it in order to limit additional interest charges.
  • If you don't send a payment with Form 4089, we will send a bill for the amount due with any interest and applicable penalties.
  • Mail any additional information you have to us immediately. Attach this letter to your correspondence to help us identify your case. Keep a copy for your records. Our consideration won't extend the deadline to file a petition with the U.S Tax Court.
  • If you don’t agree with the changes you have the right to challenge the increase in tax by filing a petition with the U.S. Tax Court. You have 90 days (150 if the notice was addressed outside the United States) to file the petition. The Court can’t consider your case if the petition is filed late. You can download a petition form and rules from www.ustaxcourt.gov or contact:

  • Clerk of the U.S. Tax Court
    400 Second Street, NW
    Washington, DC 20217
    1-202-521-0700

You may want to

  • Send us the name, address and taxpayer identification number of the other party that received the income if it isn't yours.
  • Notify the payers to correct their records to show the name and taxpayer identification number of the person or business who actually received the income, so that future reports to us are accurate.

Answers to Common Questions

Is this a Bill?
No. It tells you of the IRS’s intention to assess a tax deficiency. It isn't an assessment of tax nor does it require you to make immediate payment. We haven’t charged any additional tax at this time.

Should I call with my response or mail it in?
If you want us to consider additional information, please contact us immediately. Our consideration won't extend the deadline to file a petition with the U.S Tax Court.


If you have a simple response, such as directing us to a specific line on your original return where you reported the income, you can call a Customer Service Representative and provide the information. A toll-free number is listed in the top right hand corner of the notice.


A written response may be required if the issue is more involved, especially if you disagree with some of the proposed changes. You may want to mail copies of payer information documents such as Form(s) 1099 or Schedule(s) K-1. Include any other letters or documents that support your position. You should submit a written statement to fully explain any unusual tax situations.


If you choose to petition the United States Tax Court, the application must be submitted in writing.

Why did it take you so long to contact us about this?
Tax years generally end on Dec. 31, but we don't receive information from banks, businesses, and other payers until much later. Once we receive all the tax returns and payer information, we compare the information you reported with the information third party payers provided to us. It can take 8 months or more to complete this review.

I need more time to find my records and go through them all. Will you allow me additional time to respond?
No. The time you have to petition the United States Tax Court can't be extended. It’s important that you respond to the Statutory Notice of Deficiency or petition the United States Tax Court (if you choose to) by the due date shown on the notice. If you don’t, we’ll assume the proposed changes are correct and assess the additional deficiency.

Do I have to pay the interest? Can you remove it?
The law requires us to charge interest on any tax that isn't paid by the return due date (Internal Revenue Code Section 6601). 

The law doesn't permit us to reduce or remove interest for reasonable cause. However, in limited circumstances, we may waive penalties. If you believe you qualify for penalty removal, you should include related information in your response.

What should I do to avoid problems like this in the future?
Keep accurate payment information from banks and other payers to verify you've received all payment information for filing your return. Review the documents to be sure they show your most current address. Take the following actions when filing your tax return to avoid similar issues in the future:

  • Report specific income type on the correct line on the Form 1120, U.S. Corporation Income Tax Return. For example, rental income should be claimed on Form 1120, line 6 (Gross Rents). For additional information, please see the reporting instructions for Form 1120.
  • If you report income on a line not traditionally reserved for that type of income, provide a statement indicating where the income was reported. For example, your business is related to investment activity and you're reporting all interest income (including amounts reported to the IRS on Form 1099-INT, Interest Income) with your gross receipts on Form 1120, line 1.
  • Always attach a statement identifying the source of the amount reported on Form 1120, line 10 (Other Income).
  • Provide an attached statement explaining your percentage of gross proceeds (ex; reported to us on Form 1099-MISC) that you would be liable to claim on your tax return.
  • Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received) for each of the other owners showing the amounts applicable to each.
Page Last Reviewed or Updated: 28-Feb-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The 1040ez 2012 Form

1040ez 2012 form 6. 1040ez 2012 form   Tax Treaty Benefits Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Purpose of Tax Treaties Common Benefits Competent Authority AssistanceAdditional filing. 1040ez 2012 form Obtaining Copies of Tax Treaties Topics - This chapter discusses: Some common tax treaty benefits, How to get help in certain situations, and How to get copies of tax treaties. 1040ez 2012 form Useful Items - You may want to see: Publication 597 Information on the United States—Canada Income Tax Treaty 901 U. 1040ez 2012 form S. 1040ez 2012 form Tax Treaties See chapter 7 for information about getting these publications. 1040ez 2012 form Purpose of Tax Treaties The United States has tax treaties or conventions with many countries. 1040ez 2012 form See Table 6-1 at the end of this chapter for a list of these countries. 1040ez 2012 form Under these treaties and conventions, citizens and residents of the United States who are subject to taxes imposed by the foreign countries are entitled to certain credits, deductions, exemptions, and reductions in the rate of taxes of those foreign countries. 1040ez 2012 form If a foreign country with which the United States has a treaty imposes a tax on you, you may be entitled to benefits under the treaty. 1040ez 2012 form Treaty benefits generally are available to residents of the United States. 1040ez 2012 form They generally are not available to U. 1040ez 2012 form S. 1040ez 2012 form citizens who do not reside in the United States. 1040ez 2012 form However, certain treaty benefits and safeguards, such as the nondiscrimination provisions, are available to U. 1040ez 2012 form S. 1040ez 2012 form citizens residing in the treaty countries. 1040ez 2012 form U. 1040ez 2012 form S. 1040ez 2012 form citizens residing in a foreign country also may be entitled to benefits under that country's tax treaties with third countries. 1040ez 2012 form Certification of U. 1040ez 2012 form S. 1040ez 2012 form residency. 1040ez 2012 form   Use Form 8802, Application for United States Residency Certification, to request certification of U. 1040ez 2012 form S. 1040ez 2012 form residency for purposes of claiming benefits under a tax treaty. 1040ez 2012 form Certification can be requested for the current and any prior calendar years. 1040ez 2012 form You should examine the specific treaty articles to find if you are entitled to a tax credit, tax exemption, reduced rate of tax, or other treaty benefit or safeguard. 1040ez 2012 form Common Benefits Some common tax treaty benefits are explained below. 1040ez 2012 form The credits, deductions, exemptions, reductions in rate, and other benefits provided by tax treaties are subject to conditions and various restrictions. 1040ez 2012 form Benefits provided by certain treaties are not provided by others. 1040ez 2012 form Personal service income. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident who is in a treaty country for a limited number of days in the tax year and you meet certain other requirements, the payment you receive for personal services performed in that country may be exempt from that country's income tax. 1040ez 2012 form Professors and teachers. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident, the payment you receive for the first 2 or 3 years that you are teaching or doing research in a treaty country may be exempt from that country's income tax. 1040ez 2012 form Students, trainees, and apprentices. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident, amounts you receive from the United States for study, research, or business, professional and technical training may be exempt from a treaty country's income tax. 1040ez 2012 form Some treaties exempt grants, allowances, and awards received from governmental and certain nonprofit organizations. 1040ez 2012 form Also, under certain circumstances, a limited amount of pay received by students, trainees, and apprentices may be exempt from the income tax of many treaty countries. 1040ez 2012 form Pensions and annuities. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident, nongovernment pensions and annuities you receive may be exempt from the income tax of treaty countries. 1040ez 2012 form Most treaties contain separate provisions for exempting government pensions and annuities from treaty country income tax, and some treaties provide exemption from the treaty country's income tax for social security payments. 1040ez 2012 form Investment income. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident, investment income, such as interest and dividends, that you receive from sources in a treaty country may be exempt from that country's income tax or taxed at a reduced rate. 1040ez 2012 form Several treaties provide exemption for capital gains (other than from sales of real property in most cases) if specified requirements are met. 1040ez 2012 form Tax credit provisions. 1040ez 2012 form If you are a U. 1040ez 2012 form S. 1040ez 2012 form resident who receives income from or owns capital in a foreign country, you may be taxed on that income or capital by both the United States and the treaty country. 1040ez 2012 form Most treaties allow you to take a credit against or deduction from the treaty country's taxes based on the U. 1040ez 2012 form S. 1040ez 2012 form tax on the income. 1040ez 2012 form Nondiscrimination provisions. 1040ez 2012 form Most U. 1040ez 2012 form S. 1040ez 2012 form tax treaties provide that the treaty country cannot discriminate by imposing more burdensome taxes on U. 1040ez 2012 form S. 1040ez 2012 form citizens who are residents of the treaty country than it imposes on its own citizens in the same circumstances. 1040ez 2012 form Saving clauses. 1040ez 2012 form U. 1040ez 2012 form S. 1040ez 2012 form treaties contain saving clauses that provide that the treaties do not affect the U. 1040ez 2012 form S. 1040ez 2012 form taxation of its own citizens and residents. 1040ez 2012 form As a result, U. 1040ez 2012 form S. 1040ez 2012 form citizens and residents generally cannot use the treaty to reduce their U. 1040ez 2012 form S. 1040ez 2012 form tax liability. 1040ez 2012 form However, most treaties provide exceptions to saving clauses that allow certain provisions of the treaty to be claimed by U. 1040ez 2012 form S. 1040ez 2012 form citizens or residents. 1040ez 2012 form It is important that you examine the applicable saving clause to determine if an exception applies. 1040ez 2012 form More information on treaties. 1040ez 2012 form   Publication 901 contains an explanation of treaty provisions that apply to amounts received by teachers, students, workers, and government employees and pensioners who are alien nonresidents or residents of the United States. 1040ez 2012 form Since treaty provisions generally are reciprocal, you usually can substitute “United States” for the name of the treaty country whenever it appears, and vice versa when “U. 1040ez 2012 form S. 1040ez 2012 form ” appears in the treaty exemption discussions in Publication 901. 1040ez 2012 form   Publication 597 contains an explanation of a number of frequently-used provisions of the United States–Canada income tax treaty. 1040ez 2012 form Competent Authority Assistance If you are a U. 1040ez 2012 form S. 1040ez 2012 form citizen or resident alien, you can request assistance from the U. 1040ez 2012 form S. 1040ez 2012 form competent authority if you think that the actions of the United States, a treaty country, or both, cause or will cause a tax situation not intended by the treaty between the two countries. 1040ez 2012 form You should read any treaty articles, including the mutual agreement procedure article, that apply in your situation. 1040ez 2012 form The U. 1040ez 2012 form S. 1040ez 2012 form competent authority cannot consider requests involving countries with which the United States does not have a tax treaty. 1040ez 2012 form Effect of request for assistance. 1040ez 2012 form   If your request provides a basis for competent authority assistance, the U. 1040ez 2012 form S. 1040ez 2012 form competent authority generally will consult with the treaty country competent authority on how to resolve the situation. 1040ez 2012 form How to make your request. 1040ez 2012 form   It is important that you make your request for competent authority consideration as soon as either of the following occurs. 1040ez 2012 form You are denied treaty benefits. 1040ez 2012 form Actions taken by both the United States and the foreign country result in double taxation or will result in taxation not intended by the treaty. 1040ez 2012 form   In addition to making a request for assistance, you should take steps so that any agreement reached by the competent authorities is not barred by administrative, legal, or procedural barriers. 1040ez 2012 form Some of the steps you should consider taking include the following. 1040ez 2012 form Filing a protective claim for credit or refund of U. 1040ez 2012 form S. 1040ez 2012 form taxes. 1040ez 2012 form Delaying the expiration of any period of limitations on the making of a refund or other tax adjustment. 1040ez 2012 form Avoiding the lapse or termination of your right to appeal any tax determination. 1040ez 2012 form Complying with all applicable procedures for invoking competent authority consideration. 1040ez 2012 form Contesting an adjustment or seeking an appropriate correlative adjustment with respect to the U. 1040ez 2012 form S. 1040ez 2012 form or treaty country tax. 1040ez 2012 form Taxpayers can consult with the U. 1040ez 2012 form S. 1040ez 2012 form competent authority to determine whether they need to take protective steps and when any required steps need to be taken. 1040ez 2012 form   The request should contain all essential items of information, including the following items. 1040ez 2012 form A reference to the treaty and the treaty provisions on which the request is based. 1040ez 2012 form The years and amounts involved in both U. 1040ez 2012 form S. 1040ez 2012 form dollars and foreign currency. 1040ez 2012 form A brief description of the issues for which competent authority assistance is requested. 1040ez 2012 form   A complete listing of the information that must be included with the request can be found in Revenue Procedure 2006-54, or its successor. 1040ez 2012 form Revenue Procedure 2006-54 is available at www. 1040ez 2012 form irs. 1040ez 2012 form gov/irb/2006-49_IRB/ar13. 1040ez 2012 form html. 1040ez 2012 form   Also, see Notice 2013-78, which provides proposed updates to the procedures for requesting U. 1040ez 2012 form S. 1040ez 2012 form competent authority assistance under tax treaties. 1040ez 2012 form As noted, Revenue Procedure 2006-54 will be superseded by a revenue procedure to be published in the future. 1040ez 2012 form    Your request for competent authority consideration should be addressed to:   Deputy Commissioner (International) Large Business and International Division Internal Revenue Service 1111 Constitution Avenue, NW Routing M4-365 Washington, DC 20224 Attn: TAIT Additional filing. 1040ez 2012 form   In the case of U. 1040ez 2012 form S. 1040ez 2012 form - initiated adjustments, you also must file a copy of the request with the IRS office where your case is pending. 1040ez 2012 form If the request is filed after the matter has been designated for litigation or while a suit contesting your relevant tax liability is pending in a United States court, a copy of the request, with a separate statement attached identifying the court where the suit is pending and the docket number of the action, also must be filed with the: Office of Associate Chief Counsel (International) Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC 20224 Additional details on the procedures for requesting competent authority assistance are included in Revenue Procedure 2006-54, or its successor. 1040ez 2012 form Obtaining Copies of Tax Treaties Table 6-1 lists those countries with which the United States has income tax treaties. 1040ez 2012 form This table is updated through October 31, 2013. 1040ez 2012 form You can get complete information about treaty provisions from the taxing authority in the country from which you receive income or from the treaty itself. 1040ez 2012 form You can obtain the text of most U. 1040ez 2012 form S. 1040ez 2012 form treaties at IRS. 1040ez 2012 form gov. 1040ez 2012 form You also can request the text of treaties from the Department of Treasury at the following address. 1040ez 2012 form Department of Treasury Office of Business and Public Liaison Rm. 1040ez 2012 form 3411 1500 Pennsylvania Avenue, NW  Washington, DC 20220 If you have questions about a treaty and you are in the United States, Puerto Rico, or the U. 1040ez 2012 form S. 1040ez 2012 form Virgin Islands, you can call the IRS at 1-800-829-1040. 1040ez 2012 form Table 6–1. 1040ez 2012 form List of Tax Treaties (Updated through October 31, 2013) Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 1040ez 2012 form D. 1040ez 2012 form ) Australia TIAS 10773 Dec. 1040ez 2012 form 1, 1983 1986-2 C. 1040ez 2012 form B. 1040ez 2012 form 220 1986-2 C. 1040ez 2012 form B. 1040ez 2012 form 246 Protocol TIAS Jan. 1040ez 2012 form 1, 2004     Austria TIAS Jan. 1040ez 2012 form 1, 1999     Bangladesh TIAS Jan. 1040ez 2012 form 1, 2007     Barbados TIAS 11090 Jan. 1040ez 2012 form 1, 1984 1991-2 C. 1040ez 2012 form B. 1040ez 2012 form 436 1991-2 C. 1040ez 2012 form B. 1040ez 2012 form 466 Protocol TIAS Jan. 1040ez 2012 form 1, 2005     Belgium TIAS Jan. 1040ez 2012 form 1, 2008     Bulgaria TIAS Jan. 1040ez 2012 form 1, 2009     Canada2 TIAS 11087 Jan. 1040ez 2012 form 1, 1985 1986-2 C. 1040ez 2012 form B. 1040ez 2012 form 258 1987-2 C. 1040ez 2012 form B. 1040ez 2012 form 298 Protocol TIAS Jan. 1040ez 2012 form 1, 2009     China, People's Republic of TIAS 12065 Jan. 1040ez 2012 form 1, 1987 1988-1 C. 1040ez 2012 form B. 1040ez 2012 form 414 1988-1 C. 1040ez 2012 form B. 1040ez 2012 form 447 Commonwealth of Independent States3 TIAS 8225 Jan. 1040ez 2012 form 1, 1976 1976-2 C. 1040ez 2012 form B. 1040ez 2012 form 463 1976-2 C. 1040ez 2012 form B. 1040ez 2012 form 475 Cyprus TIAS 10965 Jan. 1040ez 2012 form 1, 1986 1989-2 C. 1040ez 2012 form B. 1040ez 2012 form 280 1989-2 C. 1040ez 2012 form B. 1040ez 2012 form 314 Czech Republic TIAS Jan. 1040ez 2012 form 1, 1993     Denmark TIAS Jan. 1040ez 2012 form 1, 2001     Protocol TIAS Jan. 1040ez 2012 form 1, 2008     Egypt TIAS 10149 Jan. 1040ez 2012 form 1, 1982 1982-1 C. 1040ez 2012 form B. 1040ez 2012 form 219 1982-1 C. 1040ez 2012 form B. 1040ez 2012 form 243 Estonia TIAS Jan. 1040ez 2012 form 1, 2000     Finland TIAS 12101 Jan. 1040ez 2012 form 1, 1991     Protocol TIAS Jan. 1040ez 2012 form 1, 2008     France TIAS Jan. 1040ez 2012 form 1, 1996     Protocol TIAS Jan. 1040ez 2012 form 1, 2009     Germany TIAS Jan. 1040ez 2012 form 1, 1990     Protocol TIAS Jan. 1040ez 2012 form 1, 2008     Greece TIAS 2902 Jan. 1040ez 2012 form 1, 1953 1958-2 C. 1040ez 2012 form B. 1040ez 2012 form 1054 T. 1040ez 2012 form D. 1040ez 2012 form 6109, 1954-2 C. 1040ez 2012 form B. 1040ez 2012 form 638 Hungary TIAS 9560 Jan. 1040ez 2012 form 1, 1980 1980-1 C. 1040ez 2012 form B. 1040ez 2012 form 333 1980-1 C. 1040ez 2012 form B. 1040ez 2012 form 354 Iceland TIAS 8151 Jan. 1040ez 2012 form 1, 2009     India TIAS Jan. 1040ez 2012 form 1, 1991     Indonesia TIAS 11593 Jan. 1040ez 2012 form 1, 1990     Ireland TIAS Jan. 1040ez 2012 form 1, 1998     Israel TIAS Jan. 1040ez 2012 form 1, 1995     Italy TIAS Jan. 1040ez 2012 form 1, 2010     Jamaica TIAS 10207 Jan. 1040ez 2012 form 1, 1982 1982-1 C. 1040ez 2012 form B. 1040ez 2012 form 257 1982-1 C. 1040ez 2012 form B. 1040ez 2012 form 291 Japan TIAS Jan. 1040ez 2012 form 1, 2005     Kazakhstan TIAS Jan. 1040ez 2012 form 1, 1996     Korea, South TIAS 9506 Jan. 1040ez 2012 form 1, 1980 1979-2 C. 1040ez 2012 form B. 1040ez 2012 form 435 1979-2 C. 1040ez 2012 form B. 1040ez 2012 form 458 Latvia TIAS Jan. 1040ez 2012 form 1, 2000     Lithuania TIAS Jan. 1040ez 2012 form 1, 2000     Luxembourg TIAS Jan. 1040ez 2012 form 1, 2001     Malta TIAS Jan. 1040ez 2012 form 1, 2011     Mexico TIAS Jan. 1040ez 2012 form 1,1994     Protocol TIAS Jan. 1040ez 2012 form 1, 2004               Table 6–1 (continued). 1040ez 2012 form Country Official Text  Symbol1 General  Effective Date Citation Applicable Treasury Explanations  or Treasury Decision (T. 1040ez 2012 form D. 1040ez 2012 form ) Morocco TIAS 10195 Jan. 1040ez 2012 form 1, 1981 1982-2 C. 1040ez 2012 form B. 1040ez 2012 form 405 1982-2 C. 1040ez 2012 form B. 1040ez 2012 form 427 Netherlands TIAS Jan. 1040ez 2012 form 1, 1994     Protocol TIAS Jan. 1040ez 2012 form 1, 2005     New Zealand TIAS 10772 Nov. 1040ez 2012 form 2, 1983 1990-2 C. 1040ez 2012 form B. 1040ez 2012 form 274 1990-2 C. 1040ez 2012 form B. 1040ez 2012 form 303 Protocol TIAS Jan. 1040ez 2012 form 1, 2011     Norway TIAS 7474 Jan. 1040ez 2012 form 1, 1971 1973-1 C. 1040ez 2012 form B. 1040ez 2012 form 669 1973-1 C. 1040ez 2012 form B. 1040ez 2012 form 693 Protocol TIAS 10205 Jan. 1040ez 2012 form 1, 1982 1982-2 C. 1040ez 2012 form B. 1040ez 2012 form 440 1982-2 C. 1040ez 2012 form B. 1040ez 2012 form 454 Pakistan TIAS 4232 Jan. 1040ez 2012 form 1, 1959 1960-2 C. 1040ez 2012 form B. 1040ez 2012 form 646 T. 1040ez 2012 form D. 1040ez 2012 form 6431, 1960-1 C. 1040ez 2012 form B. 1040ez 2012 form 755 Philippines TIAS 10417 Jan. 1040ez 2012 form 1, 1983 1984-2 C. 1040ez 2012 form B. 1040ez 2012 form 384 1984-2 C. 1040ez 2012 form B. 1040ez 2012 form 412 Poland TIAS 8486 Jan. 1040ez 2012 form 1, 1974 1977-1 C. 1040ez 2012 form B. 1040ez 2012 form 416 1977-1 C. 1040ez 2012 form B. 1040ez 2012 form 427 Portugal TIAS Jan. 1040ez 2012 form 1, 1996     Romania TIAS 8228 Jan. 1040ez 2012 form 1, 1974 1976-2 C. 1040ez 2012 form B. 1040ez 2012 form 492 1976-2 C. 1040ez 2012 form B. 1040ez 2012 form 504 Russia TIAS Jan. 1040ez 2012 form 1, 1994     Slovak Republic TIAS Jan. 1040ez 2012 form 1, 1993     Slovenia TIAS Jan. 1040ez 2012 form 1, 2002     South Africa TIAS Jan. 1040ez 2012 form 1, 1998     Spain TIAS Jan. 1040ez 2012 form 1, 1991     Sri Lanka TIAS Jan. 1040ez 2012 form 1, 2004     Sweden TIAS Jan. 1040ez 2012 form 1, 1996     Protocol TIAS Jan. 1040ez 2012 form 1, 2007     Switzerland TIAS Jan. 1040ez 2012 form 1, 1998     Thailand TIAS Jan. 1040ez 2012 form 1, 1998     Trinidad and Tobago TIAS 7047 Jan. 1040ez 2012 form 1, 1970 1971-2 C. 1040ez 2012 form B. 1040ez 2012 form 479   Tunisia TIAS Jan. 1040ez 2012 form 1, 1990     Turkey TIAS Jan. 1040ez 2012 form 1, 1998     Ukraine TIAS Jan. 1040ez 2012 form 1, 2001     United Kingdom TIAS Jan. 1040ez 2012 form 1, 2004     Venezuela TIAS Jan. 1040ez 2012 form 1, 2000      1(TIAS) — Treaties and Other International Act Series. 1040ez 2012 form  2Information on the treaty can be found in Publication 597, Information on the United States—Canada Income Tax Treaty. 1040ez 2012 form 3The U. 1040ez 2012 form S. 1040ez 2012 form -U. 1040ez 2012 form S. 1040ez 2012 form S. 1040ez 2012 form R. 1040ez 2012 form income tax treaty applies to the countries of Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan. 1040ez 2012 form Prev  Up  Next   Home   More Online Publications