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Income tax filing online 6. Income tax filing online   Ingresos de Propinas Table of Contents Introduction Useful Items - You may want to see: Cómo Mantener un Registro Diario de PropinasRegistro electrónico de propinas. Income tax filing online Cómo Declarar las Propinas a su EmpleadorInforme electrónico de propinas. Income tax filing online Declaración final. Income tax filing online Cómo se Declaran las Propinas en la Declaración de Impuestos Asignación de Propinas Introduction Este capítulo es para empleados que reciben propinas. Income tax filing online Todas las propinas que usted reciba son ingresos y están sujetas al impuesto federal sobre los ingresos. Income tax filing online Tiene que incluir en el ingreso bruto todas las propinas que reciba directamente, propinas recibidas por medio de cargos a tarjetas de crédito o débito que le son entregadas por su empleador y su participación de todas las propinas recibidas de un fondo común u otro acuerdo de distribución de propinas. Income tax filing online El valor de las propinas que no son pagadas en efectivo, tales como boletos, pases u otros artículos de valor también son ingresos y están sujetos al impuesto. Income tax filing online La declaración correcta de los ingresos de propinas no es difícil. Income tax filing online Usted tiene que completar tres pasos: Mantener un registro diario de propinas. Income tax filing online Declarar sus propinas a su empleador. Income tax filing online Declarar todas sus propinas en su declaración de impuestos. Income tax filing online  Este capítulo le explicará estos tres pasos y le ayudará a determinar cómo completar su declaración de impuestos si no ha realizado los dos primeros pasos. Income tax filing online Este capítulo también le mostrará cómo tratar las propinas asignadas. Income tax filing online Para información sobre acuerdos y programas especiales relacionados con las propinas, vea la Publicación 531, en inglés. Income tax filing online Useful Items - You may want to see: Publicación 531 Reporting Tip Income (Cómo declarar los ingresos de propinas), en inglés 1244-PR Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Patrono, en español 1244 Employee's Daily Record of Tips and Report to Employer (Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Empleador), en inglés Formularios (e Instrucciones) 4137 Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y Medicare sobre el ingreso de propinas no declaradas), en inglés 4070-PR Informe al Patrono de Propinas Recibidas por el(la) Empleado(a), disponible en español 4070 Employee's Report of Tips to Employer (Informe al Empleador de Propinas Recibidas por el(la) Empleado(a)), en inglés Cómo Mantener un Registro Diario de Propinas ¿Por qué mantener un registro diario de propinas?   Usted tiene que mantener un registro diario de propinas para que pueda: Declarar sus propinas correctamente a su empleador, Declarar sus propinas correctamente en su declaración de impuestos y Comprobar sus ingresos de propinas si se cuestiona su declaración. Income tax filing online Cómo mantener un registro diario de propinas. Income tax filing online   Hay dos maneras de mantener un registro diario de propinas. Income tax filing online Puede optar por: Anotar la información sobre sus propinas en un diario de propinas o Mantener copias de documentos que comprueben sus propinas, tales como cuentas de restaurantes y recibos de cargos hechos a tarjetas de crédito o de débito. Income tax filing online Usted debe mantener su registro diario de propinas junto con su documentación tributaria u otra documentación personal. Income tax filing online Tiene que guardar su documentación por el tiempo en que sea importante para la aplicación de la ley tributaria federal. Income tax filing online Para información sobre cuánto tiempo debe guardar esta documentación, vea el tema titulado Cuánto Tiempo Debe Mantener Los Documentos , en el capítulo 1. Income tax filing online    Si mantiene un registro de propinas, puede utilizar el Formulario 4070A-PR, Registro Diario de Propinas del(la) Empleado(a) (o el Formulario 4070-A, en inglés). Income tax filing online Para obtener el Formulario 4070A-PR (o el Formulario 4070-A), pídale al IRS o a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). Income tax filing online Asimismo, la Publicación 1244-PR está disponible en el sitio web www. Income tax filing online irs. Income tax filing online gov/pub/irs-pdf/p1244pr. Income tax filing online pdf. Income tax filing online La Publicación 1244-PR (o la Publicación 1244, en inglés) contiene suficientes copias del Formulario 4070A-PR (o del Formulario 4070-A, en inglés) para un año. Income tax filing online Cada día, anote la información solicitada en el formulario. Income tax filing online   Además de la información solicitada en el Formulario 4070A-PR, también es necesario que mantenga un registro u otra documentación de la fecha y el valor de toda propina que reciba que no sea en efectivo, tales como boletos, pases u otros artículos de valor. Income tax filing online Aunque no declara estas propinas a su empleador, tiene que declararlas en su declaración de impuestos. Income tax filing online   Si no utiliza el Formulario 4070A-PR (o el Formulario 4070-A, en inglés), comience su registro escribiendo su nombre, el nombre de su empleador y el nombre del negocio o establecimiento donde trabaja si es distinto al nombre de su empleador. Income tax filing online Luego, cada día que trabaje, anote la fecha y la siguiente información: Propinas en efectivo que obtiene directamente de los clientes o de otros empleados. Income tax filing online Propinas de los clientes que pagan con tarjeta de crédito y de débito que su empleador le paga. Income tax filing online El valor de toda propina que haya recibido que no sea pagada en efectivo, tales como boletos, pases y otros artículos de valor. Income tax filing online La cantidad de propinas que usted le pagó a otros empleados a través de un fondo común u otro acuerdo de distribución de propinas y los nombres de los empleados a los cuales les pagó las propinas. Income tax filing online Registro electrónico de propinas. Income tax filing online   Usted puede utilizar un sistema electrónico provisto por su empleador para mantener un registro de propinas diarias. Income tax filing online En tal caso, tiene que recibir y guardar una copia en papel de este registro. Income tax filing online Cargos por servicios. Income tax filing online   No anote en su registro de propinas la cantidad de ningún cargo por servicios que su empleador añada a la cuenta de un cliente y que luego le pague a usted y que el empleador trate como salario de usted. Income tax filing online Los cargos de este tipo son parte de su salario, no son propinas. Income tax filing online Vea los ejemplos que se presentan a continuación. Income tax filing online Ejemplo 1. Income tax filing online El restaurante Buena Comida añade un cargo del 18% a la cuenta de grupos de 6 o más clientes. Income tax filing online Juanita forma parte de un grupo de 8 personas. Income tax filing online Además del costo de la comida y bebidas que se sirvieron a todos en el grupo de Juanita, la cuenta incluye un monto igual al 18% del costo de las mismas, el cual aparece en la línea para anotar propinas. Income tax filing online Dicho monto se incluye en el total de la cuenta. Income tax filing online Debido a que Juanita no tenía un derecho ilimitado de determinar el monto en la línea para anotar propinas, el cargo del 18% se considera un cargo por servicios. Income tax filing online No anote el cargo del 18% en su registro de propinas. Income tax filing online Los cargos por servicios que se le paguen son considerados salarios y no propinas. Income tax filing online Ejemplo 2. Income tax filing online El restaurante Buena Comida también incluye ejemplos de cálculos para las cantidades de propinas en la parte inferior de la cuenta para la comida y las bebidas servidas a los clientes. Income tax filing online En la parte inferior de la cuenta de David, debajo de la línea para la firma, se incluye una línea en blanco para anotar propinas, además de ejemplos de propinas calculadas en base al 15%, 18% y 20% de los costos de la comida y bebidas que le sirvieron. Income tax filing online Debido a que David tenía libertad para anotar cualquier cantidad en la línea para anotar propinas, o dejarla en blanco, cualquier cantidad que David anote se considera propina. Income tax filing online Cerciórese de incluir esta cantidad en su registro de propinas. Income tax filing online Cómo Declarar las Propinas a su Empleador ¿Por qué tiene que declarar sus propinas a su empleador?   Tiene que declarar sus propinas a su empleador para que: Éste pueda retenerle impuesto federal sobre el ingreso, impuestos del Seguro Social, impuestos de Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria, Éste pueda declarar la cantidad correcta de sus ganancias a la Administración del Seguro Social o a la Junta de la Jubilación Ferroviaria (lo cual afecta sus beneficios cuando se jubile o si queda incapacitado, o los beneficios de su familia cuando usted fallezca) y Usted pueda evitar la Multa por no declarar las propinas a su empleador (tema explicado más adelante). Income tax filing online Propinas que tiene que declarar a su empleador. Income tax filing online   Declárele a su empleador solamente las propinas que reciba en efectivo, en cheques, tarjetas de débito y de crédito. Income tax filing online   Si el total de las propinas que reciba de un trabajo en un mes determinado es menos de $20, no declare las propinas de ese mes a ese empleador. Income tax filing online   Si recibe propinas conforme a un acuerdo para compartir propinas equitativamente, declare sólo las propinas que reciba y retenga. Income tax filing online No declare a su empleador ninguna parte de las propinas que reciba para luego entregárselas a otros empleados. Income tax filing online Sin embargo, tiene que declarar las propinas que reciba de otros empleados. Income tax filing online    No declare a su empleador el valor de las propinas que no reciba en efectivo, tales como boletos o pases. Income tax filing online No se pagan impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre estas propinas. Income tax filing online Cómo se declaran las propinas. Income tax filing online    Si su empleador no le proporciona otro medio para declarar las propinas, puede usar el Formulario 4070-PR, en español (o el Formulario 4070, en inglés). Income tax filing online Escriba la información requerida en el formulario, incluya su firma y la fecha y entrégueselo a su empleador. Income tax filing online Si desea obtener copias del formulario para un año completo, comuníquese con el IRS o pídale a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). Income tax filing online   Si no usa el Formulario 4070-PR (o el Formulario 4070, en inglés), entréguele a su empleador un informe con la información siguiente: Su nombre, dirección y número de Seguro Social. Income tax filing online El nombre de su empleador, la dirección y el nombre del establecimiento (si es diferente al nombre del empleador). Income tax filing online El mes (o las fechas de cualquier período más corto) en el cual usted recibió propinas. Income tax filing online El total de propinas que se tienen que declarar para ese período. Income tax filing online Usted tiene que firmar y fechar el informe. Income tax filing online Cerciórese de guardar una copia junto con sus documentos tributarios u otros documentos personales. Income tax filing online   Su empleador puede requerirle que declare sus propinas más de una vez al mes. Income tax filing online Sin embargo, el informe no puede abarcar un período mayor de un mes natural. Income tax filing online Informe electrónico de propinas. Income tax filing online   Su empleador puede exigir que facilite su informe de propinas por medios electrónicos. Income tax filing online Cuándo debe declarar las propinas. Income tax filing online   Entregue a su empleador el informe correspondiente a cada mes, a más tardar el día 10 del mes siguiente. Income tax filing online Si el día 10 cae en sábado, domingo o día feriado legal, entonces entréguele el informe a su empleador el próximo día siempre que no sea sábado, domingo o día feriado legal. Income tax filing online Ejemplo. Income tax filing online Tiene que declararle a su empleador la cantidad de propinas que recibió en septiembre del año 2014 a más tardar el día 10 de octubre de 2014. Income tax filing online Declaración final. Income tax filing online   Si deja de trabajar durante el mes, puede declarar las propinas recibidas cuando termine su empleo. Income tax filing online Multa por no declarar las propinas. Income tax filing online   Si no le declara a su empleador las propinas que recibió, tal como se requiere, puede estar sujeto a que se le imponga una multa equivalente al 50% de los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria que adeude sobre las propinas que no declaró. Income tax filing online (Para información sobre estos impuestos, vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, más adelante). Income tax filing online La cantidad de la multa que se impone es adicional a los impuestos que adeude. Income tax filing online   Puede evitar que esta multa le sea impuesta si puede demostrar que existe causa razonable por la cual no le declaró las propinas a su empleador. Income tax filing online Para hacerlo, adjunte un documento escrito a su declaración de impuestos explicando la razón por la cual no declaró la cantidad de propinas que recibió. Income tax filing online Entrega de dinero al empleador para el pago de los impuestos. Income tax filing online   Es posible que lo que gana normalmente no sea suficiente para que su empleador le retenga todos los impuestos que adeude sobre su salario normal más las propinas que recibe. Income tax filing online Si esto ocurre, puede entregarle dinero a su empleador hasta el cierre del año natural para pagar el resto de los impuestos. Income tax filing online   Si no le entrega dinero suficiente a su empleador, el mismo aplicará su salario normal y todo dinero que usted le entregue para los impuestos, en el orden siguiente: Todos los impuestos sobre su salario normal. Income tax filing online Los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre las propinas que declaró. Income tax filing online Los impuestos federales, estatales y locales sobre los ingresos sobre las propinas que declaró. Income tax filing online    Su empleador puede descontar de su próximo salario todo impuesto que quede pendiente. Income tax filing online Si al final del año aún no se le han retenido suficientes impuestos, usted puede estar sujeto a una multa por pago insuficiente de impuestos estimados. Income tax filing online Vea la Publicación 505, Tax Withholding and Estimated Tax (Retención de impuestos e impuesto estimado), en inglés, para más información. Income tax filing online    Impuestos no recaudados. Income tax filing online Usted tiene que informar en su declaración de impuestos todo impuesto del Seguro Social y Medicare o impuestos de la jubilación ferroviaria que no se recaudaron al final del año 2013. Income tax filing online Estos impuestos no recaudados aparecerán en su Formulario W-2 del año 2013. Income tax filing online Vea el tema titulado Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, a continuación. Income tax filing online Cómo se Declaran las Propinas en la Declaración de Impuestos Cómo se declaran las propinas. Income tax filing online    Declare las propinas que recibió junto con su salario en la línea 7 del Formulario 1040, la línea 7 del Formulario 1040A o en la línea 1 del Formulario 1040EZ. Income tax filing online Qué propinas se tienen que declarar. Income tax filing online   Usted tiene que informar en su declaración de impuestos todas las propinas que recibió en 2013. Income tax filing online Incluya las que recibió en efectivo y las que no fueron en efectivo. Income tax filing online Toda propina que usted haya declarado en 2013 a su empleador está incluida en los salarios que aparecen en el recuadro 1 de su Formulario W-2. Income tax filing online Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. Income tax filing online    Si recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en un mes y no las declaró a su empleador, vea más adelante el tema titulado Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador . Income tax filing online    Si usted no llevó un registro diario de las propinas que recibió, tal como se requiere, y aparece una cantidad en el recuadro 8 del Formulario W-2, vea más adelante la sección titulada Asignación de Propinas . Income tax filing online   Si usted llevó un registro diario y declaró a su empleador todas las propinas que recibió, tal como se requiere conforme a las reglas explicadas anteriormente, añada a la cantidad que aparece en el recuadro 1 de su Formulario W-2 las siguientes propinas: Las propinas que recibió tanto en efectivo como cargadas a tarjetas de crédito o débito que fueron menos de $20 en un mes cualquiera. Income tax filing online El valor de las propinas que no recibió en efectivo, tales como boletos, pases u otros artículos de valor. Income tax filing online Ejemplo. Income tax filing online Mariano Almendares comenzó a trabajar en el Restaurante Océano Azul (su único empleador en el año 2013) el día 30 de junio y recibió $10,000 en salarios durante el año. Income tax filing online Mariano llevó un registro diario de las propinas que recibió durante el año, el cual muestra que en junio recibió $18 en propinas y en el resto del año recibió $7,000 en propinas. Income tax filing online Al Sr. Income tax filing online Almendares no se le requirió declararle a su empleador las propinas que recibió en junio, pero sí le declaró todas las propinas que recibió durante el resto del año, tal como se requiere. Income tax filing online El Formulario W-2 que el Sr. Income tax filing online Almendares recibió del Restaurante Océano Azul muestra $17,000 ($10,000 de salario más $7,000 de propinas declaradas) en el recuadro 1. Income tax filing online El Sr. Income tax filing online Almendares añade a esa cantidad los $18 de propinas que no le declaró al empleador y declara $17,018 como salario en su declaración de impuestos. Income tax filing online Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador. Income tax filing online    Si en un mes recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en algún empleo y no declaró todas esas propinas a su empleador, tiene que declarar como impuesto adicional los impuestos del Seguro Social, Medicare e Impuesto Adicional del Medicare sobre las propinas que no declaró a su empleador. Income tax filing online Para declarar estos impuestos, tiene que presentar una declaración aunque de otro modo no tuviera que presentarla. Income tax filing online Para hacerlo, tiene que usar el Formulario 1040. Income tax filing online (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). Income tax filing online    Use el Formulario 4137, Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y de Medicare sobre el ingreso de propinas no declaradas), en inglés, para calcular los impuestos al Seguro Social y al Medicare. Income tax filing online Anote el impuesto en su declaración como se indica y adjunte el Formulario 4137 debidamente completado a la misma. Income tax filing online Use el Formulario 8959, en inglés, para calcular el Impuesto Adicional del Medicare. Income tax filing online    Si usted está sujeto a la Railroad Retirement Tax Act (Ley Tributaria para la Jubilación Ferroviaria), no puede utilizar el Formulario 4137 para pagar el impuesto para la jubilación ferroviaria sobre propinas no declaradas. Income tax filing online Para obtener crédito para la jubilación ferroviaria, tiene que declarar sus propinas a su empleador. Income tax filing online Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador. Income tax filing online   Usted podría tener impuestos sin recaudar si su salario normal no es suficiente para que su empleador retenga todos los impuestos adeudados y si no le dio a su empleador dinero suficiente para pagar el resto de los impuestos. Income tax filing online Para más información, vea Entrega de dinero al empleador para el pago de los impuestos , bajo Cómo Declarar las Propinas a su Empleador, anteriormente. Income tax filing online   Si su empleador no pudo recaudar todos los impuestos al Seguro Social y al Medicare o impuesto de la jubilación ferroviaria que usted adeuda sobre propinas declaradas para 2013, los impuestos por recaudar se mostrarán en el recuadro 12 del Formulario W-2 (códigos A y B). Income tax filing online Tiene que declarar estas cantidades como impuesto adicional en su declaración. Income tax filing online A diferencia de la parte no recaudada del impuesto regular al Medicare (1. Income tax filing online 45%), el Impuesto Adicional del Medicare no recaudado no se declara en el recuadro 12 del Formulario W-2 con el código B. Income tax filing online    Para declarar estos impuestos no recaudados, tiene que presentar una declaración aunque no tuviera que presentarla de otro modo. Income tax filing online Tiene que declarar estos impuestos en la línea 60 del Formulario 1040. Income tax filing online Vea las instrucciones para la línea 60 del Formulario 1040, disponibles en inglés. Income tax filing online (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). Income tax filing online Asignación de Propinas Si su empleador le asignó propinas, las mismas aparecen por separado en el recuadro 8 de su Formulario W-2. Income tax filing online Estas propinas no están incluidas en el recuadro 1 con sus salarios y propinas declaradas. Income tax filing online Si el recuadro 8 está en blanco, lo que se explica en esta sección no es aplicable en su caso. Income tax filing online ¿Qué son propinas asignadas?   Éstas son propinas que su empleador le asignó, además de las que usted le declaró para el año. Income tax filing online Su empleador habrá hecho esto únicamente si: Usted trabajó en un establecimiento (restaurante, bar o negocio similar) que tiene que asignar las propinas a los empleados y La cantidad de propinas que declaró a su empleador fue menos de su parte del 8% de las ventas de comidas y bebidas del establecimiento donde usted trabajó. Income tax filing online De las propinas asignadas, no se retienen impuestos sobre los ingresos, Seguro Social, Medicare, Impuesto Adicional del Medicare ni impuestos de la jubilación ferroviaria. Income tax filing online ¿Cómo se calcula su asignación de propinas?   Las propinas que se le asignan a usted son su parte de una cantidad calculada restando las propinas declaradas de todos los empleados del 8% (u otra tasa más baja aprobada) de las ventas de comida y bebida (que no sean ventas de comida para llevar por los clientes o ventas con un cargo por servicio del 10% o más). Income tax filing online Su parte de esa cantidad fue calculada utilizando un método provisto por un acuerdo laboral entre empleador y empleado o por un método provisto por los reglamentos del IRS basado en las ventas hechas o las horas trabajadas por los empleados. Income tax filing online Para más información sobre el método de asignación exacto utilizado, consulte a su empleador. Income tax filing online ¿Tiene que incluir en la declaración sus propinas asignadas?   Tiene que incluir en la declaración de impuestos todas las propinas que recibió en 2013, incluyendo las propinas pagadas en efectivo como las no pagadas en efectivo. Income tax filing online Todas las propinas que usted haya declarado en 2013 a su empleador están incluidas en los salarios que aparecen en el recuadro 1 de su Formulario W-2. Income tax filing online Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. Income tax filing online Esto tiene que incluir toda propina asignada mostrada en el recuadro 8 de su(s) Formulario(s) W-2, a menos que tenga registros confiables que muestren que recibió menos propinas en el año que las cifras asignadas. Income tax filing online   Vea los temas titulados Qué propinas se tienen que declarar , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos y Cómo Mantener un Registro Diario de Propinas , anteriormente. Income tax filing online Cómo declarar las propinas asignadas. Income tax filing online   Declare la cantidad en el recuadro 1 y las propinas asignadas en el recuadro 8 de su(s) Formulario(s) W-2 como salario en la línea 7 del Formulario 1040, en la línea 8 del Formulario 1040NR o en la línea 3 del Formulario 1040NR-EZ. Income tax filing online (No puede presentar el Formulario 1040A ni el Formulario 1040EZ cuando se tienen propinas asignadas). Income tax filing online    Debido a que los impuestos del Seguro Social, Medicare o Impuesto Adicional del Medicare no fueron retenidos de las propinas asignadas, tiene que declararlos como impuestos adicionales en su declaración. Income tax filing online Complete el Formulario 4137 e incluya las propinas asignadas en la línea 1 del formulario. Income tax filing online Vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos. Income tax filing online Prev  Up  Next   Home   More Online Publications
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Crash tests can help you determine how well a vehicle will protect you in a crash. Here are different organizations that perform crash tests and rate vehicles:

To find out whether a vehicle has been recalled for safety defects, contact NHTSA. If a vehicle has been recalled, ask the dealer for proof that the defect has been repaired. Used vehicles should also have a current safety inspection sticker if your state requires one.

The Income Tax Filing Online

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