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Amend Your Taxes

Amend your taxes Publication 547 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. Amend your taxes Tax questions. Amend your taxes Useful Items - You may want to see: What's New Section C of Form 4684 for Ponzi-type investment schemes. Amend your taxes  Section C of Form 4684 is new for 2013. Amend your taxes You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. Amend your taxes Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Amend your taxes You do not need to complete Appendix A. Amend your taxes For details, see Losses from Ponzi-type investment schemes , later. Amend your taxes Reminders Future developments. Amend your taxes   For the latest information about developments related to Publication 547, such as legislation enacted after it was published, go to www. Amend your taxes irs. Amend your taxes gov/pub547. Amend your taxes Photographs of missing children. Amend your taxes  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Amend your taxes Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Amend your taxes 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. Amend your taxes Introduction This publication explains the tax treatment of casualties, thefts, and losses on deposits. Amend your taxes A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident, or similar event. Amend your taxes A theft occurs when someone steals your property. Amend your taxes A loss on deposits occurs when your financial institution becomes insolvent or bankrupt. Amend your taxes This publication discusses the following topics. Amend your taxes Definitions of a casualty, theft, and loss on deposits. Amend your taxes How to figure the amount of your gain or loss. Amend your taxes How to treat insurance and other reimbursements you receive. Amend your taxes The deduction limits. Amend your taxes When and how to report a casualty or theft. Amend your taxes The special rules for disaster area losses. Amend your taxes Forms to file. Amend your taxes   Generally, when you have a casualty or theft, you have to file Form 4684. Amend your taxes You may also have to file one or more of the following forms. Amend your taxes Schedule A (Form 1040). Amend your taxes Form 1040NR, Schedule A (for nonresident aliens). Amend your taxes Schedule D. Amend your taxes Form 4797. Amend your taxes For details on which form to use, see How To Report Gains and Losses , later. Amend your taxes Condemnations. Amend your taxes   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Dispositions of Assets. Amend your taxes Workbooks for casualties and thefts. Amend your taxes   Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property), is available to help you make a list of your stolen or damaged personal-use property and figure your loss. Amend your taxes It includes schedules to help you figure the loss on your home and its contents, and your motor vehicles. Amend your taxes   Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook, is available to help you make a list of your stolen or damaged business or income-producing property and figure your loss. Amend your taxes Comments and suggestions. Amend your taxes   We welcome your comments about this publication and your suggestions for future editions. Amend your taxes   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Amend your taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Amend your taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Amend your taxes   You can send your comments from www. Amend your taxes irs. Amend your taxes gov/formspubs/. Amend your taxes Click on “More Information” and then on “Comment on Tax Forms and Publications”. Amend your taxes   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. Amend your taxes Ordering forms and publications. Amend your taxes   Visit www. Amend your taxes irs. Amend your taxes 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. Amend your taxes Internal Revenue Service 1201 N. Amend your taxes Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Amend your taxes   If you have a tax question, check the information available on IRS. Amend your taxes gov or call 1-800-829-1040. Amend your taxes We cannot answer tax questions sent to either of the above addresses. Amend your taxes Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 551 Basis of Assets 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and   Theft Loss Workbook Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Form 1040NR, Schedule A Itemized Deductions (for nonresident aliens) Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts 4797 Sales of Business Property See How To Get Tax Help near the end of this publication for information about getting publications and forms. Amend your taxes Prev  Up  Next   Home   More Online Publications Skip to content
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Recalls API Server

When you're buying and using products, safety comes first.

Access the Data

Use our Recalls API to tap into a list of car, drug, food, and product safety data and recalls.

See the most recent recalls in JSON or RSS.

You can also see how this data is used when searching for recalls on USA.gov.

Contribute to the Code

The server code that runs our Recalls API is here on Github. If you're a Ruby developer, keep reading. Fork this repo to add features (such as additional datasets) or fix bugs.

Ruby

This code is currently tested against Ruby 2.1.

Gems

We use bundler to manage gems. You can install bundler and other required gems like this:

gem install bundler
bundle install

Solr

We're using Solr for fulltext search. You can start/stop/reindex Solr like this:

bundle exec rake sunspot:solr:start
bundle exec rake sunspot:solr:stop
bundle exec rake sunspot:solr:run
bundle exec rake sunspot:solr:reindex

Database

database.yml assumes you have a local database server up and running (preferably MySQL >= 5.1.65), accessible from user 'root' with no password.

Create and setup your development and test databases:

bundle exec rake db:setup
bundle exec rake db:setup RAILS_ENV=test

Seed data

Populate recall data for your development database:

bundle exec rake usagov:recalls:import_cdc_data
bundle exec rake usagov:recalls:import_cpsc_data
bundle exec rake usagov:recalls:import_nhtsa_data

You need to run these tasks daily to receive the latest recalls data.

Running it

Fire up a server and try it all out:

bundle exec rails s

http://127.0.0.1:3000/search.json?query=stroller

API Versioning

We support API versioning with json format. The current version is v1.

You can specify a a specific JSON version of recalls data like this:

curl -H 'Accept: application/vnd.usagov.recalls.v1' http://localhost:3000/search.json

Parameters

Seven generic parameters are accepted: (1) query, (2) organization, (3) start_date, (4) end_date, (5) page, (6) per_page, and (7) sort. There are additional parameters that are specific to food, product, and car safety recalls. None are required.

Full documentation on the parameters is in our Recalls API documentation.

Tests

Tests require a Solr server to be spun up.

bundle exec rake sunspot:solr:start RAILS_ENV=test

Make sure the tests run:

bundle exec rake spec

Code Coverage

We track test coverage of the codebase over time, to help identify areas where we could write better tests and to see when poorly tested code got introduced.

After running your tests, view the report by opening coverage/rcov/index.html in your browser.

Click around on the files that have < 100% coverage to see what lines weren't exercised.

License

This project is covered under the terms of the GNU General Public License, version 2 or later.

Terms of Use

By accessing this Recalls API server, you agree to our Terms of Service.

Feedback

You can send feedback via Github Issues.


Something went wrong with that request. Please try again.

The Amend Your Taxes

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