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1040nr Ez E File

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1040nr Ez E File

1040nr ez e file 6. 1040nr ez e file   Insurance Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Deductible PremiumsSelf-Employed Health Insurance Deduction Nondeductible Premiums Capitalized Premiums When To Deduct Premiums What's New Retiree drug subsidy. 1040nr ez e file  Beginning in 2013, sponsors of certain qualified retiree prescription drug plans must account for the subsidy received by reducing the amount of qualified retiree prescription drug plans expense by the subsidy received (taking into account the taxpayer's accounting method). 1040nr ez e file For more information, see the retiree drug subsidy frequently asked questions on IRS. 1040nr ez e file gov. 1040nr ez e file Introduction You generally can deduct the ordinary and necessary cost of insurance as a business expense if it is for your trade, business, or profession. 1040nr ez e file However, you may have to capitalize certain insurance costs under the uniform capitalization rules. 1040nr ez e file For more information, see Capitalized Premiums , later. 1040nr ez e file Topics - This chapter discusses: Deductible premiums Nondeductible premiums Capitalized premiums When to deduct premiums Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 525 Taxable and Nontaxable Income 538 Accounting Periods and Methods 547 Casualties, Disasters, and Thefts Form (and Instructions) 1040 U. 1040nr ez e file S. 1040nr ez e file Individual Income Tax Return See chapter 12 for information about getting publications and forms. 1040nr ez e file Deductible Premiums You generally can deduct premiums you pay for the following kinds of insurance related to your trade or business. 1040nr ez e file Insurance that covers fire, storm, theft, accident, or similar losses. 1040nr ez e file Credit insurance that covers losses from business bad debts. 1040nr ez e file Group hospitalization and medical insurance for employees, including long-term care insurance. 1040nr ez e file If a partnership pays accident and health insurance premiums for its partners, it generally can deduct them as guaranteed payments to partners. 1040nr ez e file If an S corporation pays accident and health insurance premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages subject to federal income tax withholding. 1040nr ez e file See Publication 15-B. 1040nr ez e file Liability insurance. 1040nr ez e file Malpractice insurance that covers your personal liability for professional negligence resulting in injury or damage to patients or clients. 1040nr ez e file Workers' compensation insurance set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business, regardless of fault. 1040nr ez e file If a partnership pays workers' compensation premiums for its partners, it generally can deduct them as guaranteed payments to partners. 1040nr ez e file If an S corporation pays workers' compensation premiums for its more-than-2% shareholder-employees, it generally can deduct them, but must also include them in the shareholder's wages. 1040nr ez e file Contributions to a state unemployment insurance fund are deductible as taxes if they are considered taxes under state law. 1040nr ez e file Overhead insurance that pays for business overhead expenses you have during long periods of disability caused by your injury or sickness. 1040nr ez e file Car and other vehicle insurance that covers vehicles used in your business for liability, damages, and other losses. 1040nr ez e file If you operate a vehicle partly for personal use, deduct only the part of the insurance premium that applies to the business use of the vehicle. 1040nr ez e file If you use the standard mileage rate to figure your car expenses, you cannot deduct any car insurance premiums. 1040nr ez e file Life insurance covering your officers and employees if you are not directly or indirectly a beneficiary under the contract. 1040nr ez e file Business interruption insurance that pays for lost profits if your business is shut down due to a fire or other cause. 1040nr ez e file Self-Employed Health Insurance Deduction You may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for yourself, your spouse, and your dependents. 1040nr ez e file The insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. 1040nr ez e file A child includes your son, daughter, stepchild, adopted child, or foster child. 1040nr ez e file A foster child is any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. 1040nr ez e file One of the following statements must be true. 1040nr ez e file You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Profit or Loss From Business; Schedule C-EZ (Form 1040), Net Profit From Business; or Schedule F (Form 1040), Profit or Loss From Farming. 1040nr ez e file You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 1040nr ez e file , box 14, code A. 1040nr ez e file You used one of the optional methods to figure your net earnings from self-employment on Schedule SE. 1040nr ez e file You received wages in 2013 from an S corporation in which you were a more-than-2% shareholder. 1040nr ez e file Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2, Wage and Tax Statement. 1040nr ez e file The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business. 1040nr ez e file For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual. 1040nr ez e file For partners, a policy can be either in the name of the partnership or in the name of the partner. 1040nr ez e file You can either pay the premiums yourself or your partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. 1040nr ez e file However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. 1040nr ez e file Otherwise, the insurance plan will not be considered to be established under your business. 1040nr ez e file For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. 1040nr ez e file You can either pay the premiums yourself or your S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. 1040nr ez e file However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 as wages to be included in your gross income. 1040nr ez e file Otherwise, the insurance plan will not be considered to be established under your business. 1040nr ez e file Medicare premiums you voluntarily pay to obtain insurance in your name that is similar to qualifying private health insurance can be used to figure the deduction. 1040nr ez e file If you previously filed returns without using Medicare premiums to figure the deduction, you can file timely amended returns to refigure the deduction. 1040nr ez e file For more information, see Form 1040X, Amended U. 1040nr ez e file S. 1040nr ez e file Individual Income Tax Return. 1040nr ez e file Amounts paid for health insurance coverage from retirement plan distributions that were nontaxable because you are a retired public safety officer cannot be used to figure the deduction. 1040nr ez e file Take the deduction on Form 1040, line 29. 1040nr ez e file Qualified long-term care insurance. 1040nr ez e file   You can include premiums paid on a qualified long-term care insurance contract when figuring your deduction. 1040nr ez e file But, for each person covered, you can include only the smaller of the following amounts. 1040nr ez e file The amount paid for that person. 1040nr ez e file The amount shown below. 1040nr ez e file Use the person's age at the end of the tax year. 1040nr ez e file Age 40 or younger–$360 Age 41 to 50–$680 Age 51 to 60–$1,360 Age 61 to 70–$3,640 Age 71 or older–$4,550 Qualified long-term care insurance contract. 1040nr ez e file   A qualified long-term care insurance contract is an insurance contract that only provides coverage of qualified long-term care services. 1040nr ez e file The contract must meet all the following requirements. 1040nr ez e file It must be guaranteed renewable. 1040nr ez e file It must provide that refunds, other than refunds on the death of the insured or complete surrender or cancellation of the contract, and dividends under the contract may be used only to reduce future premiums or increase future benefits. 1040nr ez e file It must not provide for a cash surrender value or other money that can be paid, assigned, pledged, or borrowed. 1040nr ez e file It generally must not pay or reimburse expenses incurred for services or items that would be reimbursed under Medicare, except where Medicare is a secondary payer or the contract makes per diem or other periodic payments without regard to expenses. 1040nr ez e file Qualified long-term care services. 1040nr ez e file   Qualified long-term care services are: Necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and Maintenance or personal care services. 1040nr ez e file The services must be required by a chronically ill individual and prescribed by a licensed health care practitioner. 1040nr ez e file Worksheet 6-A. 1040nr ez e file Self-Employed Health Insurance Deduction Worksheet Note. 1040nr ez e file Use a separate worksheet for each trade or business under which an insurance plan is established. 1040nr ez e file 1. 1040nr ez e file Enter the total amount paid in 2013 for health insurance coverage established under your business for 2013 for you, your spouse, and your dependents. 1040nr ez e file Your insurance can also cover your child who was under age 27 at the end of 2013, even if the child was not your dependent. 1040nr ez e file But do not include the following. 1040nr ez e file   Amounts for any month you were eligible to participate in a health plan subsidized by your or your spouse's employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. 1040nr ez e file Any amounts paid from retirement plan distributions that were nontaxable because you are a retired public safety officer. 1040nr ez e file Any amounts you included on Form 8885, line 4. 1040nr ez e file Any qualified health insurance premiums you paid to “U. 1040nr ez e file S. 1040nr ez e file Treasury-HCTC. 1040nr ez e file ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H. 1040nr ez e file Any payments for qualified long-term care insurance (see line 2) 1. 1040nr ez e file   2. 1040nr ez e file For coverage under a qualified long-term care insurance contract, enter for each person covered the smaller of the following amounts. 1040nr ez e file       a) Total payments made for that person during the year. 1040nr ez e file       b) The amount shown below. 1040nr ez e file Use the person's age at the end of the tax year. 1040nr ez e file         $360— if that person is age 40 or younger          $680— if age 41 to 50         $1,360— if age 51 to 60         $3,640— if age 61 to 70         $4,550— if age 71 or older         Do not include payments for any month you were eligible to participate in a long-term care insurance plan subsidized by your or your spouse’s employer or the employer of either your dependent or your child who was under the age of 27 at the end of 2013. 1040nr ez e file If more than one person is covered, figure separately the amount to enter for each person. 1040nr ez e file Then enter the total of those amounts 2. 1040nr ez e file   3. 1040nr ez e file Add lines 1 and 2 3. 1040nr ez e file   4. 1040nr ez e file Enter your net profit* and any other earned income** from the trade or business under which the insurance plan is established. 1040nr ez e file Do not include Conservation Reserve Program payments exempt from self-employment tax. 1040nr ez e file If the business is an S corporation, skip to line 11 4. 1040nr ez e file   5. 1040nr ez e file Enter the total of all net profits* from: Schedule C (Form 1040), line 31; Schedule C-EZ (Form 1040), line 3; Schedule F (Form 1040), line 34; or Schedule K-1 (Form 1065), box 14, code A; plus any other income allocable to the profitable businesses. 1040nr ez e file Do not include Conservation Reserve Program payments exempt from self-employment tax. 1040nr ez e file See the Instructions for Schedule SE (Form 1040). 1040nr ez e file Do not include any net losses shown on these schedules. 1040nr ez e file 5. 1040nr ez e file   6. 1040nr ez e file Divide line 4 by line 5 6. 1040nr ez e file   7. 1040nr ez e file Multiply Form 1040, line 27, by the percentage on line 6 7. 1040nr ez e file   8. 1040nr ez e file Subtract line 7 from line 4 8. 1040nr ez e file   9. 1040nr ez e file Enter the amount, if any, from Form 1040, line 28, attributable to the same trade or business in which the insurance plan is established 9. 1040nr ez e file   10. 1040nr ez e file Subtract line 9 from line 8 10. 1040nr ez e file   11. 1040nr ez e file Enter your Medicare wages (Form W-2, box 5) from an S corporation in which you are a more-than-2% shareholder and in which the insurance plan is established 11. 1040nr ez e file   12. 1040nr ez e file Enter any amount from Form 2555, line 45, attributable to the amount entered on line 4 or 11 above, or any amount from Form 2555-EZ, line 18, attributable to the amount entered on line 11 above 12. 1040nr ez e file   13. 1040nr ez e file Subtract line 12 from line 10 or 11, whichever applies 13. 1040nr ez e file   14. 1040nr ez e file Enter the smaller of line 3 or line 13 here and on Form 1040, line 29. 1040nr ez e file Do not include this amount when figuring any medical expense deduction on Schedule A (Form 1040). 1040nr ez e file 14. 1040nr ez e file   * If you used either optional method to figure your net earnings from self-employment from any business, do not enter your net profit from the business. 1040nr ez e file Instead, enter the amount attributable to that business from Schedule SE (Form 1040), Section B, line 4b. 1040nr ez e file * *Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. 1040nr ez e file However, it does not include capital gain income. 1040nr ez e file Chronically ill individual. 1040nr ez e file   A chronically ill individual is a person who has been certified as one of the following. 1040nr ez e file An individual who has been unable, due to loss of functional capacity for at least 90 days, to perform at least two activities of daily living without substantial assistance from another individual. 1040nr ez e file Activities of daily living are eating, toileting, transferring (general mobility), bathing, dressing, and continence. 1040nr ez e file An individual who requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment. 1040nr ez e file The certification must have been made by a licensed health care practitioner within the previous 12 months. 1040nr ez e file Benefits received. 1040nr ez e file   For information on excluding benefits you receive from a long-term care contract from gross income, see Publication 525. 1040nr ez e file Other coverage. 1040nr ez e file   You cannot take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you did not actually participate. 1040nr ez e file In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2013, do not use amounts paid for coverage for that month to figure the deduction. 1040nr ez e file   These rules are applied separately to plans that provide long-term care insurance and plans that do not provide long-term care insurance. 1040nr ez e file However, any medical insurance payments not deductible on Form 1040, line 29, can be included as medical expenses on Schedule A (Form 1040), Itemized Deductions, if you itemize deductions. 1040nr ez e file Effect on itemized deductions. 1040nr ez e file   Subtract the health insurance deduction from your medical insurance when figuring medical expenses on Schedule A (Form 1040) if you itemize deductions. 1040nr ez e file Effect on self-employment tax. 1040nr ez e file   For tax years beginning before or after 2010, you cannot subtract the self-employed health insurance deduction when figuring net earnings for your self-employment tax from the business under which the insurance plan is established, or considered to be established as discussed earlier. 1040nr ez e file For more information, see Schedule SE (Form 1040). 1040nr ez e file How to figure the deduction. 1040nr ez e file   Generally, you can use the worksheet in the Form 1040 instructions to figure your deduction. 1040nr ez e file However, if any of the following apply, you must use Worksheet 6-A in this chapter. 1040nr ez e file You had more than one source of income subject to self-employment tax. 1040nr ez e file You file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion. 1040nr ez e file You are using amounts paid for qualified long-term care insurance to figure the deduction. 1040nr ez e file If you are claiming the health coverage tax credit, complete Form 8885, Health Coverage Tax Credit, before you figure this deduction. 1040nr ez e file Health coverage tax credit. 1040nr ez e file   You may be able to take this credit only if you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment trade adjustment assistance (RTAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient. 1040nr ez e file Use Form 8885 to figure the amount, if any, of this credit. 1040nr ez e file   When figuring the amount to enter on line 1 of Worksheet 6-A, do not include the following. 1040nr ez e file Any amounts you included on Form 8885, line 4. 1040nr ez e file Any qualified health insurance premiums you paid to “U. 1040nr ez e file S. 1040nr ez e file Treasury-HCTC. 1040nr ez e file ” Any health coverage tax credit advance payments shown in box 1 of Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments. 1040nr ez e file More than one health plan and business. 1040nr ez e file   If you have more than one health plan during the year and each plan is established under a different business, you must use separate worksheets (Worksheet 6-A) to figure each plan's net earnings limit. 1040nr ez e file Include the premium you paid under each plan on line 1 or line 2 of that separate worksheet and your net profit (or wages) from that business on line 4 (or line 11). 1040nr ez e file For a plan that provides long-term care insurance, the total of the amounts entered for each person on line 2 of all worksheets cannot be more than the appropriate limit shown on line 2 for that person. 1040nr ez e file Nondeductible Premiums You cannot deduct premiums on the following kinds of insurance. 1040nr ez e file Self-insurance reserve funds. 1040nr ez e file You cannot deduct amounts credited to a reserve set up for self-insurance. 1040nr ez e file This applies even if you cannot get business insurance coverage for certain business risks. 1040nr ez e file However, your actual losses may be deductible. 1040nr ez e file See Publication 547. 1040nr ez e file Loss of earnings. 1040nr ez e file You cannot deduct premiums for a policy that pays for lost earnings due to sickness or disability. 1040nr ez e file However, see the discussion on overhead insurance, item (8), under Deductible Premiums , earlier. 1040nr ez e file Certain life insurance and annuities. 1040nr ez e file For contracts issued before June 9, 1997, you cannot deduct the premiums on a life insurance policy covering you, an employee, or any person with a financial interest in your business if you are directly or indirectly a beneficiary of the policy. 1040nr ez e file You are included among possible beneficiaries of the policy if the policy owner is obligated to repay a loan from you using the proceeds of the policy. 1040nr ez e file A person has a financial interest in your business if the person is an owner or part owner of the business or has lent money to the business. 1040nr ez e file For contracts issued after June 8, 1997, you generally cannot deduct the premiums on any life insurance policy, endowment contract, or annuity contract if you are directly or indirectly a beneficiary. 1040nr ez e file The disallowance applies without regard to whom the policy covers. 1040nr ez e file Partners. 1040nr ez e file If, as a partner in a partnership, you take out an insurance policy on your own life and name your partners as beneficiaries to induce them to retain their investments in the partnership, you are considered a beneficiary. 1040nr ez e file You cannot deduct the insurance premiums. 1040nr ez e file Insurance to secure a loan. 1040nr ez e file If you take out a policy on your life or on the life of another person with a financial interest in your business to get or protect a business loan, you cannot deduct the premiums as a business expense. 1040nr ez e file Nor can you deduct the premiums as interest on business loans or as an expense of financing loans. 1040nr ez e file In the event of death, the proceeds of the policy are generally not taxed as income even if they are used to liquidate the debt. 1040nr ez e file Capitalized Premiums Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. 1040nr ez e file Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. 1040nr ez e file You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. 1040nr ez e file Indirect costs include premiums for insurance on your plant or facility, machinery, equipment, materials, property produced, or property acquired for resale. 1040nr ez e file Uniform capitalization rules. 1040nr ez e file   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. 1040nr ez e file Produce real property or tangible personal property. 1040nr ez e file For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. 1040nr ez e file Acquire property for resale. 1040nr ez e file However, these rules do not apply to the following property. 1040nr ez e file Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. 1040nr ez e file Property you produce if you meet either of the following conditions. 1040nr ez e file Your indirect costs of producing the property are $200,000 or less. 1040nr ez e file You use the cash method of accounting and do not account for inventories. 1040nr ez e file More information. 1040nr ez e file   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. 1040nr ez e file When To Deduct Premiums You can usually deduct insurance premiums in the tax year to which they apply. 1040nr ez e file Cash method. 1040nr ez e file   If you use the cash method of accounting, you generally deduct insurance premiums in the tax year you actually paid them, even if you incurred them in an earlier year. 1040nr ez e file However, see Prepayment , later. 1040nr ez e file Accrual method. 1040nr ez e file   If you use an accrual method of accounting, you cannot deduct insurance premiums before the tax year in which you incur a liability for them. 1040nr ez e file In addition, you cannot deduct insurance premiums before the tax year in which you actually pay them (unless the exception for recurring items applies). 1040nr ez e file For more information about the accrual method of accounting, see chapter 1. 1040nr ez e file For information about the exception for recurring items, see Publication 538. 1040nr ez e file Prepayment. 1040nr ez e file   You cannot deduct expenses in advance, even if you pay them in advance. 1040nr ez e file This rule applies to any expense paid far enough in advance to, in effect, create an asset with a useful life extending substantially beyond the end of the current tax year. 1040nr ez e file   Expenses such as insurance are generally allocable to a period of time. 1040nr ez e file You can deduct insurance expenses for the year to which they are allocable. 1040nr ez e file Example. 1040nr ez e file In 2013, you signed a 3-year insurance contract. 1040nr ez e file Even though you paid the premiums for 2013, 2014, and 2015 when you signed the contract, you can only deduct the premium for 2013 on your 2013 tax return. 1040nr ez e file You can deduct in 2014 and 2015 the premium allocable to those years. 1040nr ez e file Dividends received. 1040nr ez e file   If you receive dividends from business insurance and you deducted the premiums in prior years, at least part of the dividends generally are income. 1040nr ez e file For more information, see Recovery of amount deducted (tax benefit rule) in chapter 1 under How Much Can I Deduct. 1040nr ez e file Prev  Up  Next   Home   More Online Publications
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The 1040nr Ez E File

1040nr ez e file Publication 517 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. 1040nr ez e file Tax questions. 1040nr ez e file Useful Items - You may want to see: What's New SE tax rate. 1040nr ez e file  For 2013 and 2014, the Old Age, Survivors, and Disability Insurance (OASDI) portion of the SE tax is 12. 1040nr ez e file 4%. 1040nr ez e file The Medicare (HI) portion of the SE tax remains 2. 1040nr ez e file 9%. 1040nr ez e file As a result, the SE tax rate returns to 15. 1040nr ez e file 3%. 1040nr ez e file For more information, see the Instructions for Schedule SE (Form 1040). 1040nr ez e file Earnings subject to social security. 1040nr ez e file  For 2013, the maximum wages and self-employment income subject to social security tax increases from $110,100 to $113,700. 1040nr ez e file For 2014, the maximum wages and self-employment income subject to social security tax is $117,000. 1040nr ez e file Additional Medicare Tax. 1040nr ez e file  Beginning in 2013, a 0. 1040nr ez e file 9% Additional Medicare Tax applies to Medicare wages, railroad retirement (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. 1040nr ez e file For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 1040nr ez e file Modified AGI limit for traditional IRA contributions increased. 1040nr ez e file  For 2013, you may be able to take an IRA deduction if you were covered by a retirement plan at work and your modified AGI is: Less than $115,000 if married filing jointly or qualifying widow(er), Less than $69,000 if single or head of household, or Less than $10,000 if married filing separately. 1040nr ez e file If you file a joint return and either you or your spouse was not covered by a retirement plan at work, you may be able to take an IRA deduction if your modified AGI is less than $188,000. 1040nr ez e file Modified AGI limit for Roth IRA contributions increased. 1040nr ez e file  For 2013, you may be able to contribute to your Roth IRA if your modified AGI is: Less than $188,000 if married filing jointly or qualifying widow(er), Less than $127,000 if single, head of household, or married filing separately and you did not live with your spouse at any time during the year, or Less than $10,000 if married filing separately and you lived with your spouse at any time during the year. 1040nr ez e file Earned income credit (EIC). 1040nr ez e file  For 2013, the maximum amount of income you can earn and still claim the EIC has increased. 1040nr ez e file You may be able to take the EIC if you earned less than $46,227 ($51,567 for married filing jointly) and you have three or more qualifying children; $43,038 ($48,378 for married filing jointly) and you have two qualifying children; $37,870 ($43,210 for married filing jointly) and you have one qualifying child; and $14,340 ($19,680 for married filing jointly) and you do not have any qualifying children. 1040nr ez e file Reminders Future developments. 1040nr ez e file . 1040nr ez e file   For the latest information about developments related to Publication 517, such as legislation enacted after it was published, go to www. 1040nr ez e file irs. 1040nr ez e file gov/pub517. 1040nr ez e file Photographs of missing children. 1040nr ez e file  The Internal Revenue Service is a proud partner with the National Center for Missing & Exploited Children. 1040nr ez e file Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040nr ez e file You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040nr ez e file Introduction Three federal taxes are paid on wages and self-employment income—income tax, social security tax, and Medicare tax. 1040nr ez e file Social security and Medicare taxes are collected under one of two systems. 1040nr ez e file Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. 1040nr ez e file Under the Federal Insurance Contributions Act (FICA), the employee and the employer each pay half of the social security and Medicare taxes. 1040nr ez e file No earnings are subject to both systems. 1040nr ez e file Table 1. 1040nr ez e file Are Your Ministerial Earnings* Covered Under FICA or SECA? Find the class to which you belong in the left column and read across the table to find if you are covered under FICA or SECA. 1040nr ez e file Do not rely on this table alone. 1040nr ez e file Also read the discussion for the class in the following pages. 1040nr ez e file Class Covered under FICA? Covered under SECA? Minister NO. 1040nr ez e file Your ministerial earnings are exempt. 1040nr ez e file YES, if you do not have an approved exemption from the IRS. 1040nr ez e file   NO, if you have an approved exemption. 1040nr ez e file Member of a religious order who has not taken a vow of poverty NO. 1040nr ez e file Your ministerial earnings are exempt. 1040nr ez e file YES, if you do not have an approved exemption from the IRS. 1040nr ez e file   NO, if you have an approved exemption. 1040nr ez e file Member of a religious order who has taken a vow of poverty YES, if: Your order elected FICA coverage for its members, or You worked outside the order and the work was not required by, or done on behalf of, the order. 1040nr ez e file   NO, if neither of the above applies. 1040nr ez e file NO. 1040nr ez e file Your ministerial earnings are exempt. 1040nr ez e file Christian Science practitioner or reader NO. 1040nr ez e file Your ministerial earnings are exempt. 1040nr ez e file YES, if you do not have an approved exemption from the IRS. 1040nr ez e file   NO, if you have an approved exemption. 1040nr ez e file Religious worker (church employee) YES, if your employer did not elect to exclude you. 1040nr ez e file    NO, if your employer elected to exclude you. 1040nr ez e file YES, if your employer elected to exclude you from FICA. 1040nr ez e file   NO, if you are covered under FICA. 1040nr ez e file Member of a recognized religious sect YES, if you are an employee and do not have an approved exemption from the IRS. 1040nr ez e file    NO, if you have an approved exemption. 1040nr ez e file YES, if you are self-employed and do not have an approved exemption from the IRS. 1040nr ez e file   NO, if you have an approved exemption. 1040nr ez e file * Ministerial earnings are the self-employment earnings that result from ministerial services, defined and discussed later. 1040nr ez e file In addition, all wages and self-employment income that are subject to Medicare tax are subject to a 0. 1040nr ez e file 9% Additional Medicare Tax if they are paid in excess of the applicable threshold for an individual's filing status. 1040nr ez e file 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. 1040nr ez e file Medicare wages and self-employment income are combined to determine if income exceeds the threshold. 1040nr ez e file A self-employment loss is not considered for purposes of this tax. 1040nr ez e file RRTA compensation is separately compared to the threshold. 1040nr ez e file There is no employer match for Additional Medicare Tax. 1040nr ez e file For more information, see Form 8959, Additional Medicare Tax, and its separate instructions. 1040nr ez e file This publication contains information for the following classes of taxpayers. 1040nr ez e file Ministers. 1040nr ez e file Members of a religious order. 1040nr ez e file Christian Science practitioners and readers. 1040nr ez e file Religious workers (church employees). 1040nr ez e file Members of a recognized religious sect. 1040nr ez e file Note. 1040nr ez e file Unless otherwise noted, in this publication references to members of the clergy include ministers, members of a religious order (but not members of a recognized religious sect), and Christian Science practitioners and readers. 1040nr ez e file This publication covers the following topics about the collection of social security and Medicare taxes from members of the clergy, religious workers, and members of a recognized religious sect. 1040nr ez e file Which earnings are taxed under FICA and which under SECA. 1040nr ez e file See Table 1 above. 1040nr ez e file How a member of the clergy can apply for an exemption from self-employment tax. 1040nr ez e file How a member of a recognized religious sect can apply for an exemption from both self-employment tax and FICA taxes. 1040nr ez e file How a member of the clergy or religious worker figures net earnings from self-employment. 1040nr ez e file This publication also covers certain income tax rules of interest to ministers and members of a religious order. 1040nr ez e file A Comprehensive Example shows filled-in forms for a minister who has income taxed under SECA, other income taxed under FICA, and income tax reporting of items specific to a minister. 1040nr ez e file In the back of Publication 517 is a set of worksheets that you can use to figure the amount of your taxable ministerial income and allowable deductions. 1040nr ez e file You will find these worksheets right after the Comprehensive Example . 1040nr ez e file Note. 1040nr ez e file In this publication, the term “church” is generally used in its generic sense and not in reference to any particular religion. 1040nr ez e file Comments and suggestions. 1040nr ez e file   We welcome your comments about this publication and your suggestions for future editions. 1040nr ez e file   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040nr ez e file NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040nr ez e file Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040nr ez e file   You can send your comments from www. 1040nr ez e file irs. 1040nr ez e file gov/formspubs/. 1040nr ez e file Click on “More Information” and then on “Give us feedback”. 1040nr ez e file   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040nr ez e file Ordering forms and publications. 1040nr ez e file   Visit www. 1040nr ez e file irs. 1040nr ez e file gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040nr ez e file Internal Revenue Service 1201 N. 1040nr ez e file Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040nr ez e file   If you have a tax question, check the information available on IRS. 1040nr ez e file gov or call 1-800-829-1040. 1040nr ez e file We cannot answer tax questions sent to either of the above addresses. 1040nr ez e file Useful Items - You may want to see: Publication 54 Tax Guide for U. 1040nr ez e file S. 1040nr ez e file Citizens and Resident Aliens Abroad 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 590 Individual Retirement Arrangements (IRAs) 596 Earned Income Credit (EIC) Form (and Instructions) SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding SS-16 Certificate of Election of Coverage Under the Federal Insurance Contributions Act Schedule C (Form 1040) Profit or Loss From Business (Sole Proprietorship) Schedule C-EZ (Form 1040) Net Profit From Business (Sole Proprietorship) Schedule SE (Form 1040) Self-Employment Tax 1040-ES Estimated Tax for Individuals 1040X Amended U. 1040nr ez e file S. 1040nr ez e file Individual Income Tax Return 4029 Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits 4361 Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes 8959 Additional Medicare Tax Ordering publications and forms. 1040nr ez e file   See How To Get Tax Help , near the end of this publication, for information about getting these publications and forms. 1040nr ez e file Prev  Up  Next   Home   More Online Publications