2017 Publication 517 P517
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Publication 517
Contents
Social Security
and Other
Information for
Members of the
Clergy and
Religious
Workers
Future Developments . . . . . . . . . . . . 1
Cat. No. 15021X
Department
of the
Treasury
Internal
Revenue
Service
What's New
.................. 1
Reminders . . . . . . . . . . . . . . . . . . . 2
Introduction . . . . . . . . . . . . . . . . . . 2
Social Security Coverage . . . . . . . . . . 3
............. 4
Ministerial Services
Exemption From Self-Employment
(SE) Tax . . . . . . . . . . . . . . . . . 5
Self-Employment Tax: Figuring Net
Earnings . . . . . . . . . . . . . . . . . 7
Income Tax: Income and Expenses . . . . 9
Filing Your Return
. . . . . . . . . . . . . 11
Retirement Savings Arrangements . . . 12
For use in preparing
2017 Returns
Health Care: Individual
Responsibility . . . . . . . . . . . . . 12
Earned Income Credit (EIC)
. . . . . . . 12
Comprehensive Example . . . . . . . . . 13
Worksheets
. . . . . . . . . . . . . . . . . 26
How To Get Tax Help
Index
. . . . . . . . . . . 28
. . . . . . . . . . . . . . . . . . . . . 30
Future Developments
For the latest information about developments
related to Pub. 517, such as legislation enacted
after this publication was published, go to
IRS.gov/Pub517.
What's New
Standard mileage rate. The business standard mileage rate for 2017 is 53.5 cents a mile.
Earnings subject to social security tax. For
2017, the maximum wages and self-employment income subject to social security tax has
increased to $127,200.
Get forms and other information faster and easier at:
• IRS.gov (English)
• IRS.gov/Spanish (Español)
• IRS.gov/Chinese (中文)
Dec 29, 2017
• IRS.gov/Korean (한국어)
• IRS.gov/Russian (Pусский)
• IRS.gov/Vietnamese (TiếngViệt)
Modified adjusted gross income (AGI) limit
for traditional IRA contributions. For 2017,
you may be able to take an IRA deduction for
your contributions if you were covered by a retirement plan at work and your modified AGI is:
Less than $119,000 if married filing jointly
or qualifying widow(er);
Less than $72,000 if single or head of
household; or
Less than $10,000 if married filing separately.
If you file a joint return and either you or your
spouse wasn't covered by a retirement plan at
work, you may be able to take an IRA deduction
if your modified AGI is less than $196,000.
Modified AGI limit for Roth IRA contributions increased. For 2017, you may be able to
contribute to your Roth IRA if your modified AGI
is:
Less than $196,000 if married filing jointly
or qualifying widow(er);
Less than $133,000 if single, head of
household, or married filing separately and
you didn't live with your spouse at any time
during the year; or
Less than $10,000 if married filing separately and you lived with your spouse at
any time during the year.
Earned income credit (EIC). For 2017, the
maximum amount of income you can earn and
still claim the EIC has increased. See Earned
Income Credit, later.
This publication contains information for the
following classes of taxpayers.
Ministers.
Members of a religious order.
Christian Science practitioners and readers.
Religious workers (church employees).
Members of a recognized religious sect.
Note. Unless otherwise noted, in this publication references to members of the clergy include ministers, members of a religious order
(but not members of a recognized religious
Table 1.
Reminders
Social security information. Social Security
beneficiaries may quickly and easily obtain various information from SSA's website with a my
Social Security account, including getting a replacement Form SSA-1099 or SSA-1042S. For
more information, go to SSA.gov/myaccount.
Photographs of missing children. The IRS is
a proud partner with the National Center for
Missing & Exploited Children® (NCMEC). Photographs of missing children selected by the
Center may appear in this publication on pages
that would otherwise be blank. You can help
bring these children home by looking at the
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.
Introduction
Three federal taxes are paid on wages and
self-employment income—income tax, social
security tax, and Medicare tax. Social security
and Medicare taxes are collected under one of
two systems. Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. Under the Federal Insurance Contributions Act (FICA), the employee
and the employer each pay half of the social security and Medicare taxes. No earnings are
subject to both systems.
In addition, all wages and self-employment
income that are subject to Medicare tax are
subject to a 0.9% Additional Medicare Tax to
the extent they exceed the applicable threshold
for an individual's filing status. Medicare wages
and self-employment income are combined to
determine if income exceeds the threshold. A
self-employment loss isn't considered for purposes of this tax. Railroad retirement (RRTA)
compensation is separately compared to the
threshold. Additional Medicare Tax applies to
Medicare wages, 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.
There is no employer match for Additional Medicare Tax. For more information, see Form
8959, Additional Medicare Tax, and its separate
instructions.
sect), and Christian Science practitioners and
readers.
This publication covers the following topics
about the collection of social security and Medicare taxes from members of the clergy, religious workers, and members of a recognized
religious sect.
Which earnings are taxed under FICA and
which under SECA. See Table 1.
How a member of the clergy can apply for
an exemption from self-employment tax.
How a member of a recognized religious
sect can apply for an exemption from both
self-employment tax and FICA taxes.
Are Your Ministerial Earnings* Covered Under FICA or SECA?
Find the class to which you belong in the left column and read
across the table to find if you are covered under FICA or SECA.
Don't rely on this table alone. Also read the discussion for the class
in the following pages.
Class
Minister
Covered under FICA?
NO. Your ministerial earnings
are exempt.
Covered under SECA?
YES, if you don't have an
approved exemption from
the IRS.
NO, if you have an
approved exemption.
Member of a religious order
who hasn't taken a vow of
poverty
NO. Your ministerial earnings
are exempt.
YES, if you don't have an
approved exemption from
the IRS.
NO, if you have an
approved exemption.
Member of a religious order
who has taken a vow of
poverty
YES, if:
Your order elected FICA
coverage for its
members; or
You worked outside the
order and the work
wasn't required by, or
done on behalf of, the
order.
NO. Your ministerial
earnings are exempt.
NO, if neither of the above
applies.
Christian Science practitioner
or reader
NO. Your ministerial earnings
are exempt.
YES, if you don't have an
approved exemption from
the IRS.
NO, if you have an
approved exemption.
Religious worker (church
employee)
Member of a recognized
religious sect
YES, if your employer didn't
elect to exclude you.
YES, if your employer
elected to exclude you from
FICA.
NO, if your employer elected
to exclude you.
NO, if you are covered
under FICA.
YES, if you are an employee
and don't have an approved
exemption from the IRS.
YES, if you are
self-employed and don't
have an approved
exemption from the IRS.
NO, if you have an approved
exemption.
NO, if you have an
approved exemption.
* Ministerial earnings are the self-employment earnings that result from ministerial services, defined and discussed
later.
Page 2
Publication 517 (2017)
How a member of the clergy or religious
worker figures net earnings from self-employment.
This publication also covers certain income
tax rules of interest to ministers and members
of a religious order.
A Comprehensive Example shows filled-in
forms for a minister who has income taxed under SECA, other income taxed under FICA, and
income tax reporting of items specific to a minister.
In the back of Pub. 517 is a set of that
you can use to figure the amount of
your taxable ministerial income and allowable deductions. You will find these worksheets right after the Comprehensive Example.
Note. In this publication, the term “church”
is generally used in its generic sense and not in
reference to any particular religion.
Comments and suggestions. We welcome
your comments about this publication and your
suggestions for future editions.
You can send us comments through
IRS.gov/FormComments. Or you can write to:
Internal Revenue Service
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
Although we can’t respond individually to
each comment received, we do appreciate your
feedback and will consider your comments as
we revise our tax forms, instructions, and publications.
Ordering forms and publications. Visit
IRS.gov/FormsPubs to download forms and
publications. Otherwise, you can go to IRS.gov/
OrderForms to order current and prior-year
forms and instructions. Your order should arrive
within 10 business days.
Tax questions. If you have a tax question
not answered by this publication, check
IRS.gov and How To Get Tax Help at the end of
this publication.
Useful Items
You may want to see:
Publication
54 Tax Guide for U.S. Citizens and
Resident Aliens Abroad
525 Taxable and Nontaxable Income
529 Miscellaneous Deductions
535 Business Expenses
590-A Contributions to Individual
Retirement Arrangements (IRAs)
590-B Distributions from Individual
Retirement Arrangements (IRAs)
596 Earned Income Credit (EIC)
Form (and Instructions)
SS-8 Determination of Worker Status for
Purposes of Federal Employment
Taxes and Income Tax Withholding
Publication 517 (2017)
SS-16 Certificate of Election of Coverage
Under the Federal Insurance
Contributions Act
Schedule C (Form 1040) Profit or Loss
From Business (Sole Proprietorship)
Schedule C-EZ (Form 1040) Net Profit
From Business (Sole Proprietorship)
Security (Totalization) Agreements in Pub.
54.
Your earnings that aren't from ministerial
services may be subject to social security tax
under FICA or SECA according to the rules that
apply to taxpayers in general. See Ministerial
Services, later.
Schedule SE (Form 1040)
Self-Employment Tax
Ministers
1040-ES Estimated Tax for Individuals
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. However, you can request that the IRS
grant you an exemption, as discussed under
Exemption From Self-Employment (SE) Tax,
later. For the specific services covered, see
Ministerial Services, later.
1040X Amended U.S. Individual Income
Tax Return
4029 Application for Exemption From
Social Security and Medicare Taxes
and Waiver of Benefits
4361 Application for Exemption From
Self-Employment Tax for Use by
Ministers, Members of Religious
Orders and Christian Science
Practitioners
8274 Certification by Churches and
Qualified Church-Controlled
Organizations Electing Exemption
From Employer Social Security and
Medicare Taxes
8959 Additional Medicare Tax
8962 Premium Tax Credit (PTC)
8965 Health Coverage Exemptions
Ordering publications and forms. See How
To Get Tax Help, at the end of this publication,
for information about getting these publications
and forms.
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).
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. Your
earnings for these ministerial services (defined
later) are subject to self-employment (SE) tax
unless one of the following applies.
You are a member of a religious order who
has taken a vow of poverty.
You ask the IRS for an exemption from SE
tax for your services and the IRS approves
your request. See Exemption From
Self-Employment (SE) Tax, later.
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.
For more information, see Bilateral Social
Ministers defined. Ministers are individuals
who are duly ordained, commissioned, or licensed by a religious body constituting a
church or church denomination. 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.
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.
Employment status for other tax purposes.
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. For income tax or retirement plan purposes, your income earned as an employee will
be considered wages.
Common-law employee. Under common-law rules, you are considered either an
employee or a self-employed person. 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. For more information about the common-law rules, see Pub. 15-A, Employer's Supplemental Tax Guide.
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.
However, amounts received directly from members of the congregation, such as fees for performing marriages, baptisms, or other personal
services, aren't wages; such amounts are
self-employment income for both income tax
purposes and social security tax purposes.
Example. A church hires and pays you a
salary to perform ministerial services subject to
its control. Under the common-law rules, you
are an employee of the church while performing
those services.
Page 3
Form SS-8. If you aren't certain whether
you are an employee or a self-employed person, you can get a determination from the IRS
by filing Form SS-8.
Members of Religious Orders
If you are a member of a religious order who
hasn't taken a vow of poverty, your earnings for
ministerial services you perform as a member of
the order are subject to SE tax. See Ministerial
Services, later. However, you can request that
the IRS grant you an exemption as discussed
under Exemption From Self-Employment (SE)
Tax, later.
Vow of poverty. 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.
You don't need to request a separate exemption. For income tax purposes, the earnings are
tax free to you. Your earnings are considered
the income of the religious order.
Services covered under FICA at the
election of the order. 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. 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.
The order or subdivision elects coverage by
filing Form SS-16. 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. If the election is made, the order or subdivision pays both
the employer's and employee's share of the tax.
You don't pay any of the FICA tax.
Services performed outside the order.
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.
In these cases, your income from self-employment or as an employee of that outside organization is taxable to you directly. You may,
however, be able to take a charitable deduction
for the amount you turn over to the order. See
Pub. 526, Charitable Contributions.
Rulings. 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. To request a ruling, follow the procedures in
Revenue Procedure 2018-1. To find the revenue procedure, go to IRS.gov and type “Revenue Procedure 2018-1” in the search box.
Page 4
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.
However, you can request an exemption as discussed under Exemption From Self-Employment (SE) Tax, later.
Practitioners. 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.
State law specifically exempts Christian Science practitioners from licensing requirements.
Some Christian Science practitioners also
are Christian Science teachers or lecturers. Income from teaching or lecturing is considered
the same as income from their work as practitioners.
Readers. For tax purposes, Christian Science
readers are considered the same as ordained,
commissioned, or licensed ministers.
Coverage of Religious
Workers (Church
Employees)
If you are a religious worker (a church employee) and aren't in one of the classes already
discussed, your wages are generally subject to
social security and Medicare tax under FICA,
not SECA. Some exceptions are discussed
next.
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 may elect to
exclude their employees from FICA coverage. If
your employer makes this election, it doesn't
pay the employer's portion of the FICA taxes or
withhold from your pay your portion of the FICA
taxes. Instead, your wages are subject to SECA
and you must pay SE tax on your wages if they
exceed $108.28 during the tax year. However,
you can request an exemption from SE tax if
you are a member of a recognized religious
sect, as discussed below.
Churches and church organizations make
this election by filing two copies of Form 8274.
For more information about making this election, see Form 8274.
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
doesn't pay the employer's part of the social security tax on wages. This exemption doesn't apply to your service, if any, as a minister of a
church or as a member of a religious order.
Make this choice by filing Form 4029. See
Requesting Exemption—Form 4029, later, under Members of Recognized Religious Sects.
U.S. 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. Nonresident aliens aren't covered under SECA unless a
social security agreement in effect between the
United States and the foreign country determines that they are covered under the U.S. social security system.
To determine your alien status, see Pub.
519, U.S. Tax Guide for Aliens.
Residents of Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands (CNMI), and
American Samoa. If you are a resident of one
of these U.S. possessions but not a U.S. citizen, for SE tax purposes you are treated the
same as a citizen or resident alien of the United
States. For information on figuring the tax, see
Self-Employment Tax: Figuring Net Earnings,
later.
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 you receive for performing ministerial services is subject to SE tax unless you
have an exemption as explained later. Even if
you have an exemption, only the income you receive for performing ministerial services is exempt. The exemption doesn't apply to any other
income.
The following discussions provide more detailed information on ministerial services of ministers, members of a religious order, and Christian Science practitioners and readers.
Ministers
Most services you perform as a minister, priest,
rabbi, etc., are ministerial services. 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.
You are considered to control, conduct, and
maintain a religious organization if you direct,
manage, or promote the organization's activities.
Publication 517 (2017)
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.
Services for nonreligious organizations.
Your services for a nonreligious organization
are ministerial services if the services are assigned or designated by your church. Assigned
or designated services qualify even if they don't
involve performing sacerdotal functions or conducting religious worship.
If your services aren't assigned or designated by your church, they are ministerial services
only if they involve performing sacerdotal functions or conducting religious worship.
Services that aren't part of your ministry.
Income from services you perform as an employee that aren't ministerial services is subject
to social security and Medicare tax withholding
under FICA (not SECA) under the rules that apply to employees in general. The following
aren't ministerial services.
Services you perform for nonreligious organizations other than the services stated
above.
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. These services aren't ministerial
services even if you are performing sacerdotal functions or conducting religious worship. (For example, if you perform services
as a chaplain in the Armed Forces of the
United States, those services aren't ministerial services.)
Services you perform in a government-owned and operated hospital.
(These services are considered performed
by a government employee, not by a minister as part of the ministry.) 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.
Books or articles. Writing religious books or
articles is considered to be in the exercise of
your ministry and is considered a ministerial
service.
This rule also applies to members of religious orders and to Christian Science practitioners and readers.
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. The services
are considered ministerial because you perform
them as an agent of the order.
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.
Publication 517 (2017)
Table 2.
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, any
of which came 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, any
of which came from ministerial
services
For all tax years beginning with the
first year you meet the eligibility
requirements discussed later
However, if the order directs you to work
outside the order, this employment won't 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.
Effect of employee status. Ordinarily, if your
services aren't considered directed or required
of you by the order, you and the outside party
for whom you work are considered employee
and employer. 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 performed as an agent of the order.
This result is true even if you have taken a vow
of poverty.
Example. Pat Brown and Chris Green are
members of a religious order and have taken
vows of poverty. They renounce all claims to
their earnings. The earnings belong to the order.
Pat is a licensed attorney. The superiors of
the order instructed her to get a job with a law
firm. Pat joined a law firm as an employee and,
as she requested, the firm made the salary payments directly to the order.
Chris is a secretary. The superiors of the order instructed him to accept a job with the business office of the church that supervises the order. Chris took the job and gave all his earnings
to the order.
Pat's services aren't duties required by the
order. Her earnings are subject to social security and Medicare tax under FICA and to federal
income tax.
Chris' services are duties required by the order. He is acting as an agent of the order and
not as an employee of a third party. He doesn't
include the earnings in gross income, and they
aren't subject to income tax withholding or to
social security and Medicare tax under FICA or
SECA.
Christian Science
Practitioners and Readers
Services you perform as a Christian Science
practitioner or reader in the exercise of your
profession are ministerial services. Amounts
you receive for performing these services are
generally subject to SE tax. You may request an
exemption from SE tax, discussed next, which
applies only to those services.
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.
Generally, members of religious orders
TIP 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. They
don't have to request the exemption.
Who can't be exempt. You can't be exempt
from SE tax if you made one of the following
elections to be covered under social security.
These elections are irrevocable.
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.
You elected before 1968 to be covered under social security for your ministerial services.
Requesting exemption. Table 2 briefly summarizes the procedure for requesting
Page 5
exemption from the SE tax. More detailed explanations follow.
If you are a minister, member of a religious order, or Christian Science pracCAUTION titioner, an approved exemption only
applies to earnings you receive for ministerial
services, discussed earlier. It doesn't apply to
any other self-employment income.
!
Members of the Clergy
To claim the exemption from SE tax, you must
meet all of the following conditions.
You file Form 4361, described below under
Requesting Exemption—Form 4361.
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.
You file for other than economic reasons.
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). This requirement doesn't apply
to Christian Science practitioners or readers.
You establish that the organization that ordained, commissioned, or licensed you, or
your religious order, is a tax-exempt religious organization.
You establish that the organization is a
church or a convention or association of
churches.
You didn't make an election discussed earlier under Who can't be exempt.
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.
Requesting Exemption—Form
4361
To request exemption from SE tax, file Form
4361 in triplicate (original and two copies) with
the IRS.
The IRS will return to you a copy of the
Form 4361 that you filed indicating
RECORDS whether it has approved your exemption. If it is approved, keep the approved copy
of Form 4361 in your permanent records.
When to file. 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.
1. You have net earnings from self-employment of at least $400.
2. Any part of those net earnings was from
ministerial services you performed as a:
a. Minister,
b. Member of a religious order, or
c. Christian Science practitioner or
reader.
Page 6
The 2 years don't have to be consecutive tax
years.
The approval process can take some
TIP time, so you should file Form 4361 as
soon as possible.
Example 1. Rev. Lawrence Jaeger, a clergyman ordained in 2017, has net self-employment earnings as a minister of $450 in 2017
and $500 in 2018. He must file his application
for exemption by the due date, including extensions, for his 2018 income tax return. However,
if Rev. Jaeger doesn't receive IRS approval for
an exemption by April 15, 2019, his SE tax for
2018 is due by that date.
Example 2. Rev. Louise Wolfe has only
$300 in net self-employment earnings as a minister in 2017, but earned more than $400 in
2016 and expects to earn more than $400 in
2018. She must file her application for exemption by the due date, including extensions, for
her 2018 income tax return. However, if she
doesn't receive IRS approval for an exemption
by April 15, 2019, her SE tax for 2018 is due by
that date.
Example 3. In 2015, Rev. David Moss was
ordained a minister and had $700 in net
self-employment earnings as a minister. In
2016, he received $1,000 as a minister, but his
related expenses were over $1,000. Therefore,
he had no net self-employment earnings as a
minister in 2016. Also in 2016, he opened a
book store and had $8,000 in net self-employment earnings from the store. In 2017, he had
net self-employment earnings of $1,500 as a
minister and $10,000 net self-employment
earnings from the store.
Rev. Moss had net earnings from self-employment in 2015 and 2017 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. Thus, he must file his
application for exemption by the due date, including extensions, for his 2017 income tax return. However, if Rev. Moss doesn't receive IRS
approval for an exemption by April 17, 2018, his
SE tax for 2017 is due by that date.
Death of individual. The right to file an application for exemption ends with an individual's
death. A surviving spouse, executor, or administrator can't file an exemption application for a
deceased clergy member.
Effective date of exemption. 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. Once the exemption is approved, it
is irrevocable.
Example. Rev. Trudy Austin, ordained in
2014, had $400 or more in net self-employment
earnings, in both 2014 and 2017, part of which
was from her services as a minister. She files
an application for exemption on February 19,
2018. If an exemption is granted, it is effective
for 2014 and the following years.
Refunds of SE tax. If, after receiving an approved Form 4361, you find that you overpaid
SE tax, you can file a claim for refund on Form
1040X. 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. A return you
filed, or tax you paid, before the due date is
considered to have been filed or paid on the
due date.
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 won't be more than the tax
you paid within the 2 years immediately before
you file the claim.
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.
Exception. 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 can't apply. However, if you pay your benefits back, you
may be considered for exemption. Contact your
local Social Security Administration office to
find out the amount you must pay back.
Eligibility requirements. To claim this exemption from SE tax, all the following requirements must be met.
1. You must file Form 4029, discussed later
under Requesting Exemption—Form
4029.
2. 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.
3. 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.
4. The Commissioner of Social Security must
determine that:
a. Your sect or division has the established teachings as described in (2)
above;
b. 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
c. The sect or division has existed at all
times since December 31, 1950.
Publication 517 (2017)
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. The sect or division must
complete part of the form.
The IRS will return to you a copy of the
Form 4029 that you filed indicating
RECORDS whether it has approved your exemption. If it is approved, keep the approved copy
of Form 4029 in your permanent records.
When to file. You can file Form 4029 at any
time.
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. See Effective date of
exemption next for information on when the
newly approved exemption would become effective.
If you have a previously approved exemption from SE tax, you are considered to have
met the requirements for exemption from social
security and Medicare taxes on wages and
don't need to file a new Form 4029.
Effective date of exemption. 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. (For example, if you meet the eligibility requirements in 2015, file Form 4029 in 2016, and
the IRS approves your exemption in 2017, your
exemption is effective for tax year 2015 and all
later years.)
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. 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. The
exemption will end for the tax year in which you
or your sect/division first fails to meet the eligibility requirements.
Refunds of SE tax paid. To get a refund of
any SE tax you paid while the exemption was in
effect, file Form 1040X. For information on filing
this form, see Refunds of SE tax under Requesting Exemption—Form 4361, earlier.
Exemption From FICA Taxes
Generally, under FICA, the employer and the
employee each pay half of the social security
and Medicare tax. 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.
A partnership in which each partner holds a
religious exemption from social security and
Medicare tax is an employer for this purpose.
Publication 517 (2017)
If the employer's application is ap-
TIP proved, the exemption will apply only to
FICA taxes on wages paid to employees who also received an approval of identical
applications.
Information for employers. If you have an
approved Form 4029 and you have an employee who has an approved Form 4029, don't
report wages you paid to the employee as social security and Medicare wages.
If you have an employee who doesn't have
an approved Form 4029, you must withhold the
employee's share of social security and Medicare taxes and pay the employer's share.
Form W-2. When preparing a Form W-2 for
an employee with an approved Form 4029, enter “Form 4029” in box 14, “Other.” Don't make
any entries in box 3, 4, 5, or 6.
Forms 941, 943, and 944. If both you and
your employee have received approved Forms
4029, don't include these exempt wages on the
following forms. Instead, follow the instructions
given below.
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.
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.
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.
Effective date. 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. 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.
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.
Regular method.
Nonfarm optional method.
You may find Worksheets 1 through 4
TIP helpful in figuring your net earnings
from self-employment. Blank worksheets are in the back of this publication, after
the Comprehensive Example.
Regular Method
Most people use the regular method. 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 hasn't taken a vow
of poverty, or a Christian Science practitioner or
reader. Then, subtract your allowable business
deductions and multiply the difference by
92.35% (0.9235). Use Schedule SE (Form
1040) to figure your net earnings and SE tax.
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 92.35% (0.9235). Don't
reduce your wages by any business deductions
when making this computation. Use Schedule SE (Form 1040), Section B, to figure your
net earnings and SE tax.
If you have an approved exemption, or
you are automatically exempt, don't inCAUTION clude the income or deductions from
ministerial services in figuring your net earnings
from self-employment.
!
Amounts included in gross income. To figure your net earnings from self-employment (on
Schedule SE (Form 1040)), include in gross income:
1. Salaries and fees for your ministerial services (discussed earlier);
2. Offerings you receive for marriages, baptisms, funerals, masses, etc.;
3. The value of meals and lodging provided
to you, your spouse, and your dependents
for your employer's convenience;
4. 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
5. Any amount a church pays toward your income tax or SE tax, other than withholding
the amount from your salary. This amount
is also subject to income tax.
For the income tax treatment of items (2)
and (4), see Income Tax: Income and Expenses, later.
Example. Pastor Roger Adams receives an
annual salary of $39,000 as a full-time minister.
The $39,000 includes $5,000 that is designated
as a rental allowance to pay utilities. His church
owns a parsonage that has a fair rental value of
$12,000 per year. The church gives Pastor
Adams the use of the parsonage. He isn't exempt from SE tax. He must include $51,000
($39,000 plus $12,000) when figuring his net
earnings for SE tax purposes.
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.
Overseas duty. 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.S.
citizen or resident alien serving abroad and living in a foreign country.
For information on excluding foreign earned
income or the foreign housing amount, see Pub.
54.
Example. Diane Jones was the minister of
a U.S. church in Mexico. She earned $35,000 in
Page 7
that position and was able to exclude it all for income tax purposes under the foreign earned income exclusion. The United States doesn't
have a social security agreement with Mexico,
so Mrs. Jones is subject to U.S. SE tax and
must include $35,000 when figuring net earnings from self-employment.
Specified U.S. possessions. The exclusion
from gross income for amounts derived from
American Samoa or Puerto Rico doesn't apply
in figuring net earnings from self-employment.
Also see Residents of Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands (CNMI), and American Samoa, earlier, under U.S. Citizens and
Resident and Nonresident Aliens.
Amounts not included in gross income.
Don't include the following amounts in gross income when figuring your net earnings from
self-employment.
Offerings that others made to the church.
Contributions by your church to a tax-sheltered annuity plan set up for you, including
any salary reduction contributions (elective
deferrals) that aren't included in your gross
income.
Pension payments or retirement allowances you receive for your past ministerial
services.
The rental value of a parsonage or a parsonage allowance provided to you after
you retire.
Allowable deductions. When figuring your
net earnings from self-employment, deduct all
your expenses related to your ministerial services performed as a self-employed person.
These are ministerial expenses you incurred
while working other than as a common-law employee of the church. They include expenses incurred in performing marriages and baptisms,
and in delivering speeches. 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.
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. 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. Don't
complete Schedule C or C-EZ (Form 1040).
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.
Employee reimbursement arrangements. 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. Ask your employer if you
aren't sure if it reimburses you using an accountable or a nonaccountable plan.
Page 8
Accountable plans. To be an accountable
plan, your employer's reimbursement arrangement must include all three of the following
rules.
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.
You must adequately account to your employer for these expenses within a reasonable period of time.
You must return any excess reimbursement or allowance within a reasonable period of time.
The reimbursement isn't reported on your
Form W-2. Generally, if your expenses equal
your reimbursement, you have no deduction. If
your expenses are more than your reimbursement, you can deduct your excess expenses for
SE tax and income tax purposes.
Nonaccountable plan. A nonaccountable
plan is a reimbursement arrangement that
doesn't meet all three of the rules listed under
Accountable plans above. In addition, even if
your employer has an accountable plan, the following payments will be treated as being paid
under a nonaccountable plan.
Excess reimbursements you fail to return
to your employer.
Reimbursement of nondeductible expenses related to your employer's business.
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. Because 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.
For more information on accountable and
nonaccountable plans, see Pub. 463, Travel,
Entertainment, Gift, and Car Expenses.
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.
If the agreement is with one spouse only
and the other spouse isn't paid for any specific
duties, amounts received for their services are
included only in the self-employment income of
the spouse having the agreement.
Earnings Subject
to SE Tax
For 2017, the maximum net earnings from
self-employment subject to social security (old
age, survivors, and disability insurance) tax is
$127,200 minus any wages and tips you earned
that were subject to social security tax. The tax
rate for the social security part is 12.4%. In addition, all of your net earnings are subject to the
Medicare (hospital insurance) part of the SE
tax. This tax rate is 2.9%. The combined
self-employment tax rate is 15.3%.
Additional Medicare Tax. A 0.9% Additional
Medicare Tax applies to Medicare wages,
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.
Medicare wages and self-employment income
are combined to determine if income exceeds
the threshold. A self-employment loss isn't considered for purposes of this tax. RRTA compensation is separately compared to the threshold.
For more information, see Form 8959, Additional Medicare Tax, and its separate instructions.
Nonfarm Optional Method
You may be able to use the nonfarm optional
method for figuring your net earnings from
self-employment. 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.
You may use the nonfarm optional method if
you meet all the following tests.
1. You are self-employed on a regular basis.
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.
The net earnings can be from either farm
or nonfarm earnings or both.
2. You have used this method less than 5
prior years. (There is a 5-year lifetime
limit.) The years don't have to be consecutive.
3. Your net nonfarm profits were:
a. Less than $5,631; and
b. Less than 72.189% of your gross nonfarm income.
If you meet all three tests, use Table 3 to figure your net earnings from self-employment under the nonfarm optional method.
Table 3. Figuring Nonfarm Net
Earnings
IF your gross
nonfarm
income is ...
THEN your net earnings
are equal to ...
$7,800 or less
Two-thirds of your gross
nonfarm income.
More than
$7,800
$5,200
Actual net earnings. Multiply your total earnings subject to SE tax by 92.35% (0.9235) to
get actual net earnings. Actual net earnings are
equivalent to net earnings under the “Regular
Method.”
More information. For more information on
the nonfarm optional method, see Pub. 334,
Publication 517 (2017)
Tax Guide for Small Business, and the Schedule SE (Form 1040) instructions.
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.
Note. For purposes of this section, references to members of the clergy are only to ministers or members of a religious order.
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.
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., in addition to your salary. If the offering is made to the religious institution, it isn't
taxable to you.
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. However, you may be entitled to a
charitable contribution deduction for the amount
paid to the organization. For more information,
see Pub. 526.
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. 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.
This exclusion applies only for income tax
purposes. It doesn't apply for SE tax purposes,
as discussed earlier under Amounts included in
gross income under Self-Employment Tax: Figuring Net Earnings.
Designation requirement. The church or organization that employs you must officially designate the payment as a housing allowance before it makes the payment. It must designate a
definite amount. It can't determine the amount
of the housing allowance at a later date. If the
church or organization doesn't officially desigPublication 517 (2017)
nate a definite amount as a housing allowance,
you must include your total salary in your income.
If you are employed and paid by a local congregation, a resolution by a national church
agency of your denomination doesn't effectively
designate a housing allowance for you. The local congregation must officially designate the
part of your salary that is a housing allowance.
However, a resolution of a national church
agency can designate your housing allowance if
you are directly employed by the national
agency.
An official designation of an amount as a
housing or rental allowance may be shown in
an employment contract, in the minutes of a
church or qualified organization, in a budget, or
any official action taken in advance of payment
of the allowance. A designation is sufficient if it
permits a payment to be identified as a payment
of a rental or housing allowance as distinguished from salary or other remuneration.
Informal discussions don't amount to an official designation. However, the facts and circumstances of a designation may demonstrate
that the designation was official.
A church or employing organization
TIP may report the rental allowance or fair
rental value of the parsonage (and utilities) in box 14 of Form W-2.
Rental allowances. 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 isn't more than reasonable
pay for your services.
The amount you exclude can't be more than
the fair rental value of the home, including furnishings, plus the cost of utilities.
Fair rental value of parsonage. 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. However, the exclusion can't be more than the reasonable pay for your services. If you pay for the
utilities, you can exclude any allowance designated for utility costs, up to your actual cost.
Example. Rev. Joanna Baker is a full-time
minister. The church allows her to use a parsonage that has an annual fair rental value of
$24,000. The church pays her an annual salary
of $67,000, of which $7,500 is designated for
utility costs. Her actual utility costs during the
year were $7,000.
For income tax purposes, Rev. Baker excludes $31,000 from gross income ($24,000 fair
rental value of the parsonage plus $7,000 from
the allowance for utility costs). She will report
$60,000 ($59,500 salary plus $500 of unused
utility allowance). Her income for SE tax purposes, however, is $91,000 ($67,000 salary +
$24,000 fair rental value of the parsonage).
Home ownership. 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.
Excess rental allowance. 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.
Include this amount in the total on Form
1040, line 7. On the dotted line next to line 7,
enter “Excess allowance” and the amount.
You may deduct the home mortgage
TIP 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. However, you can only deduct these expenses as itemized deductions on Schedule A
(Form 1040).
Retired ministers. 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. However, a minister's surviving spouse can't exclude the rental value unless the rental value is
for ministerial services he or she performs or
performed.
Teachers or administrators. 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. However, if you perform
services as a teacher or administrator on the
faculty of a nonchurch college, you can't exclude from your income a housing allowance or
the value of a home that the college provides to
you.
If you live in faculty lodging as an em-
TIP ployee of an educational institution or
academic health center, all or part of
the value of that lodging may be nontaxable under a different rule. In Pub. 525, see Faculty
lodging in the discussion on meals and lodging
under Fringe Benefits.
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
aren't 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
doesn't apply to you.
Theological students. If you are a theological
student serving a required internship as a
part-time or assistant pastor, you can't exclude
a parsonage or rental allowance from your income unless you are ordained, commissioned,
or licensed as a minister.
Page 9
Traveling evangelists. You can exclude a
designated rental allowance from out-of-town
churches if you meet all of the following requirements.
You are an ordained minister.
You perform ministerial services at
churches located away from your community.
You actually use the rental allowance to
maintain your permanent home.
Cantors. 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.
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.
See Members of Religious Orders, earlier,
under Social Security Coverage.
Foreign Earned Income
Certain income may be exempt from income tax
if you work in a foreign country or in a specified
U.S. possession. Pub. 54 discusses the foreign
earned income exclusion. Pub. 570, Tax Guide
for Individuals With Income From U.S. Possessions, covers the rules for taxpayers with income from U.S. possessions. You can get
these free publications from the IRS at IRS.gov/
Forms or from most U.S. embassies or consulates.
Expense Items
The tax treatment of ministerial trade or business expenses, expenses allocable to tax-free
income, and health insurance costs is discussed here.
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. You also may have to
file Form 2106, Employee Business Expenses
(or Form 2106-EZ, Unreimbursed Employee
Business Expenses).
You claim these expenses as miscellaneous
itemized deductions that are subject to the
2%-of-adjusted-gross-income (AGI) limit. See
Pub. 529 for more information on this limit.
Page 10
A list of each item of tax-free ministerial income by source (parsonage allowance)
plus the amount.
A list of each item of otherwise deductible
ministerial expenses plus the amount.
How you figured the nondeductible part of
your otherwise deductible expenses.
A statement that the other deductions
claimed on your tax return aren't allocable
to your tax-free income.
However, you can't deduct any of your employee business expenses that are allocable to
tax-free income (discussed next).
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. You
can't deduct the portion of your expenses that
you allocate to your tax-free rental or parsonage
allowance.
See the attachments prepared for the Comprehensive Example, later. Following the example, you will find blank worksheets for your own
use.
Exception. This rule doesn't apply to your deductions for home mortgage interest or real estate taxes on your home.
Health Insurance Costs of
Self-Employed Ministers
Figuring the allocation. Figure the portion of
your otherwise deductible expenses that you
can't 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.
Reduce your otherwise deductible ex-
TIP penses only in figuring your income
tax, not your SE tax.
Example. Rev. 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. He incurred $4,000 of
unreimbursed expenses connected with his
earnings for ministerial services. $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.
Rev. 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. 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. If you receive a tax-free
rental or parsonage allowance and have ministerial expenses, attach a statement to your tax
return. The statement must contain all of the following information.
A list of each item of taxable ministerial income by source (such as wages, salary,
weddings, baptisms, etc.) plus the amount.
If you are self-employed, you may be able to
deduct the amount you paid in 2017 for medical
and dental insurance and qualified long-term
care insurance for you, your spouse, your dependents, and any child you may have who, as
of the end of the tax year, had not attained age
27.
For purposes of this deduction, your child
must be an individual who is your son, daughter, stepson, stepdaughter, or eligible foster
child. An individual who has been legally adopted by you (or placed with you for adoption) will
be treated as your child.
If you qualify, you can take this deduction as
an adjustment to income on Form 1040, line 29.
See the Instructions for Form 1040 to figure
your deduction.
The following special rules apply to the
self-employed health insurance deduction.
You can't take a medical expense deduction on Schedule A (Form 1040) for any expenses you claim for purposes of the
self-employed health insurance deduction.
You can't take the deduction for any month
you are eligible to participate in a subsidized plan of your (or your spouse's) employer.
The deduction can't exceed your net earnings from the business under which the insurance plan is established. Your net earnings under this rule don't include the
income you earned as a common-law employee (discussed earlier) of a church.
More information. For more information about
the self-employed health insurance deduction,
see chapter 6 in Pub. 535.
Deduction for SE Tax
You can deduct one-half of your SE tax in figuring AGI. This is an income tax deduction only,
on Form 1040, line 27.
!
CAUTION
Don't claim this deduction in figuring
net earnings from self-employment
subject to SE tax.
Publication 517 (2017)
Income Tax Withholding
and Estimated Tax
The federal income tax is a pay-as-you-go tax.
You must pay the tax as you earn or receive income during the year. An employee usually has
income tax withheld from his or her wages or
salary. However, your salary isn't subject to federal income tax withholding if both of the following conditions apply.
You are a duly ordained, commissioned, or
licensed minister, a member of a religious
order (who hasn't taken a vow of poverty),
or a Christian Science practitioner or
reader.
Your salary is for ministerial services (see
Ministerial Services, earlier).
If your salary isn't subject to withholding, or if
you don't 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.
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.
Determine your estimated tax by using the
worksheets in Pub. 505, Tax Withholding and
Estimated Tax. You can also use the IRS Withholding calculator at IRS.gov/W4App . Pay the
entire estimated tax for 2018 or the first installment by April 17, 2018. See Form 1040-ES for
the different payment methods. The April 17
date applies whether or not your tax home and
your abode are outside the United States and
Puerto Rico. For more information, see chapter 2 of Pub. 505.
If you perform your services as a common-law employee of the church and your
salary isn't subject to income tax withholding,
you can enter into a voluntary withholding
agreement with the church to cover any income
and SE tax that may be due.
Filing Your Return
You must file an income tax return for 2017 if
your gross income was at least the amount
shown in the third column of Table 4.
Additional requirements. 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 aren't 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 $108.28 or more from
an electing church or church-controlled organization (see Coverage of Religious
Workers (Church Employees), earlier, under Social Security Coverage).
Self-employment tax. For services in the exercise of the ministry, members of the clergy receive a Form W-2, but do not have social security or Medicare taxes withheld. You must pay
social security and Medicare taxes by filing
Schedule SE (Form 1040) with your return.
If you filed Form 4361 and didn't receive approval from the IRS, you must pay SE tax on
your ministerial earnings, as explained earlier.
You should report ministerial earnings and expenses from nonemployee ministerial services
on Schedule C or C-EZ (Form 1040). You
should then carry the net amount over to line 2
of Schedule SE (Form 1040), Section A or B.
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, don't report those wages on
Schedule C or C-EZ (Form 1040). 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.
Note. 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. You can't deduct these expenses on
Schedule C or C-EZ (Form 1040) as a trade or
business expense.
Exemption from SE tax. If you filed Form
4361 and received IRS approval not to be taxed
on your ministerial earnings, and you don't have
any other income subject to SE tax, don't file
Schedule SE (Form 1040). Instead, enter “Exempt—Form 4361” on the dotted line next to
Form 1040, line 57. 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.
If you filed Form 4029 and received IRS approval not to be taxed on those earnings, and
you don't have any other income subject to SE
tax, don't file Schedule SE (Form 1040). Instead, enter “Form 4029” on the dotted line next
to Form 1040, line 57.
Table 4. 2017 Filing Requirements for Most Taxpayers
IF your filing status is ...
AND at the end of 2017
you were* ...
THEN file a return if your gross income** was
at least ...
single
under age 65
65 or older
$10,400
$11,950
married filing jointly***
under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)
$20,800
$22,050
$23,300
married filing separately
any age
$ 4,050
head of household
under 65
65 or older
$13,400
$14,950
qualifying widow(er)
under 65
65 or older
$16,750
$18,000
* If you were born on January 1, 1953, you are considered to be age 65 at the end of 2017. (If your spouse died in 2017 or you are preparing a return for
someone who died in 2017, see Pub. 501, Exemptions, Standard Deduction, and Filing Information.)
** Gross income means all income you received in the form of money, goods, property, and services that isn't 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). 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 2017, 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). 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. Gross income includes gains, but not losses,
reported on Form 8949 or Schedule D (Form 1040). Gross income from a business means, for example, the amount on Schedule C (Form 1040), line 7; or
Schedule F (Form 1040), line 9. But, in figuring gross income, don't reduce your income by any losses, including any loss on Schedule C (Form 1040),
line 7; or Schedule F (Form 1040), line 9.
*** If you didn't live with your spouse at the end of 2017 (or on the date your spouse died) and your gross income was at least $4,050, you must file a return
regardless of your age.
Publication 517 (2017)
Page 11
More information. For more information on filing your return, including when and where to file
it, see the Instructions for Form 1040.
Retirement Savings
Arrangements
Retirement savings arrangements are plans
that offer you a tax-favored way to save for your
retirement. You generally can deduct your contributions to the plan. Your contributions and the
earnings on them aren't taxed until they are distributed.
Retirement plans for the self-employed. To
set up one of the following plans you must be
self-employed.
SEP (simplified employee pension) plan.
SIMPLE (savings incentive match plan for
employees) plan.
Qualified retirement plan (also called a
Keogh or H.R. 10 plan), including a 401(k)
plan.
The common-law rules determine whether
you are an employee or a self-employed person
for purposes of setting up a retirement plan.
See Employment status for other tax purposes
under Coverage of Members of the Clergy, earlier. This result is true even if your compensation for ministerial services (defined earlier) is
subject to SE tax.
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.
You aren't a self-employed person for purposes
of setting up a retirement plan. This result is true
even if your salary is subject to SE tax.
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.
For more information on establishing a SEP,
SIMPLE, or qualified retirement plan, see Pub.
560, Retirement Plans for Small Business.
Individual retirement arrangements (IRAs).
The traditional IRA and the Roth IRA are two individual retirement arrangements you can use
to save money for your retirement. Generally,
your maximum contribution for 2017 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 by the
end of 2017).
However, your maximum contribution to a
Roth IRA will be further reduced or eliminated if
your adjusted gross income (AGI) is above a
certain amount. You can't 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.
If you contribute to a traditional IRA, your
contribution may be deductible. However, your
deduction may be reduced or eliminated if you
Page 12
or your spouse is covered by an employer retirement plan (including, but not limited to, a
SEP, SIMPLE, or qualified retirement plan).
For more information on IRAs, see Pub.
590-A, Contributions to Individual Retirement
Arrangements.
Tax-sheltered annuity plans. 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. For
more information, see Pub. 571, Tax-Sheltered
Annuity Plans.
Deducting contributions to tax-sheltered
annuity plans. If you are an employee, your
employer may exclude allowable contributions
to a 403(b) plan from your income. These contributions won't be included in your total wages
on your Form W-2, but you will pay tax on distributions from your plan. However, if you choose
to have contributions made to a Roth contribution program, they won't be excluded from your
income, but will be distributed tax free.
You may also participate in a 403(b) plan if
you are a minister or chaplain and, in the exercise of your ministry, you are either self-employed or employed by an organization that isn't
exempt from tax under section 501(c)(3) of the
Internal Revenue Code. If either situation applies to you, you can deduct your contributions
to a 403(b) plan as explained next.
If you are self-employed, deduct your contributions on Form 1040, line 28.
If you aren't self-employed and your employer doesn't exclude your contributions
from your earned income, deduct your
contributions on Form 1040, line 36. Enter
the amount of your deduction and “403(b)”
on the dotted line next to line 36.
Retirement savings contributions credit.
You may be able to take a tax credit of up to
$1,000 (up to $2,000 if filing jointly) for certain
contributions you make to any of the retirement
plans or IRAs discussed earlier. The credit is
based on the contributions you make and your
credit rate. Your credit rate can be as low as
10% or as high as 50%, depending on your filing status and AGI. Figure the credit on Form
8880, Credit for Qualified Retirement Savings
Contributions.
You can't take the credit if any of the following apply.
1. You were born after January 1, 2000.
2. You were a student who during any part of
5 calendar months (not necessarily consecutive) of 2017:
a. Was enrolled as a full-time student at
a school; or
b. Took a full-time, on-farm training
course given by a school or a state,
county, or local government agency.
3. Someone, such as your parent(s), claims
an exemption for you on his or her 2017
tax return.
4. Your AGI for 2017 is more than:
a. $62,000, if your filing status is married
filing jointly;
b. $46,500, if your filing status is head of
household; or
c. $31,000, if your filing status is single,
married filing separately, or qualifying
widow(er).
Full-time student. You are a full-time student if you are enrolled for the number of hours
or courses the school considers to be full time.
AGI. When figuring AGI, you must add back
any exclusion or deduction claimed for the year
for:
1. Foreign earned income,
2. Foreign housing costs,
3. Income of bona fide residents of American
Samoa, and
4. Income of bona fide residents of Puerto
Rico.
More information. For more information
about the credit, see Pub. 590-A.
Health Care: Individual
Responsibility
Shared responsibility payment. If for any
month in 2017, you, your spouse (if filing
jointly), or your dependents didn't have qualifying health care coverage (called minimum essential coverage) and didn't qualify for a coverage exemption, then you must make a shared
responsibility payment. For more information,
go to IRS.gov/SRP. Also see the instructions for
line 61 in the Form 1040 instructions and Form
8965.
Minimum essential coverage. Most health
care coverage that people have is minimum essential coverage. Minimum essential coverage
includes:
Most types of health care coverage provided by your employer;
Many types of government-sponsored
health care coverage including Medicare,
most Medicaid coverage, and most health
care coverage provided to veterans and
active duty service members;
Health care coverage you buy through the
Marketplace; and
Certain types of health care coverage you
buy directly from an insurance company.
See the instructions for Form 8965 for more information on what qualifies as minimum essential coverage.
Premium tax credit. If you, your spouse, or a
dependent enrolled in health insurance through
the Marketplace, you may be able to claim the
premium tax credit. See the instructions for
Form 1040, line 69, and Form 8962.
Earned Income Credit
(EIC)
The EIC is a tax credit for certain people who
work. If you qualify for it, the EIC reduces the
Publication 517 (2017)
tax you owe. Even if you don't owe tax, you can
get a refund of the credit.
You can't take the credit for 2017 if your
earned income (or adjusted gross income) is:
$15,010 or more ($20,600 or more if married filing jointly) and you don't have a
qualifying child,
$39,617 or more ($45,207 or more if married filing jointly) and you have one qualifying child,
$45,007 or more ($50,597 or more if married filing jointly) and you have two qualifying children, or
$48,340 or more ($53,930 if married filing
jointly) and you have three or more qualifying children.
Earned
your:
income. Earned
income
includes
1. Wages, salaries, tips, and other taxable
employee compensation (even if these
amounts are exempt from FICA or SECA
under an approved Form 4029 or 4361);
and
2. Net earnings from self-employment that
are not exempt from SECA (you don't
have an approved Form 4029 or 4361)
that you report on Schedule SE, line 3,
with the following adjustments.
a. Subtract the amount you claimed (or
should have claimed) on Form 1040,
line 27, for the deductible part of your
SE tax.
b. Add any amount from Schedule SE,
Section B, line 4b and line 5a.
To figure your EIC, see the Form 1040 instructions for lines 66a and 66b.
$7,000. The local community college paid him
$3,400 for teaching a course. The Whites paid
$925 in general state and local sales taxes during 2017.
Rev. and Mrs. White own a home next to the
church. They make a $650 per month mortgage
payment of principal and interest only. They
paid $1,800 in real estate taxes for the year on
the home. The church paid Rev. White $800 per
month as his parsonage allowance (excluding
utilities). The home's fair rental value for the
year (excluding utilities) is $9,840. The utility
bills for the year totaled $960. The church paid
him $100 per month ($1,200 for the year) designated as an allowance for utility costs.
First, the parts of Rev. and Mrs. White's income tax return are explained in the order the
Whites complete them. Next, the parts are illustrated in the order that Rev. White will assemble
the return to send it to the IRS.
Form W-2 From Church
The church completed its Form W-2 for Rev.
White as follows.
Box 1. The church entered Rev. White's
$31,000 salary.
Box 2. The church left this box blank because
Rev. White didn't request federal income tax
withholding.
Boxes 3 through 6. Rev. White is considered
a self-employed person for purposes of social
security and Medicare tax withholding, so the
church left these boxes blank.
If you are a minister and have an approved Form 4361, your earned inCAUTION come will still include wages and salaries earned as an employee, but it will not
include amounts you received for nonemployee
ministerial duties, such as fees for performing
marriages and baptisms, and honoraria for delivering speeches.
Box 14. The church entered Rev. White's total
parsonage and utilities allowance for the year
and identified them.
More information. For detailed rules on this
credit, see Pub. 596. To figure the amount of
your credit, you can either fill out a worksheet or
have the IRS figure the credit for you. You may
need to complete Schedule EIC and attach it to
your tax return.
Box 1. The college entered Rev. White's
$3,400 salary.
!
Comprehensive
Example
Rev. John White is the minister of the First United Church. He is married and has one child,
Jennifer. Jennifer is considered a qualifying
child for the child tax credit. Mrs. Susan White
isn't employed outside the home. Rev. White is
a common-law employee of the church, and he
hasn't applied for an exemption from SE tax.
The church paid Rev. White a salary of
$31,000. In addition, as a self-employed person, he earned $4,000 during the year for weddings, baptisms, and honoraria. He made
estimated tax payments during the year totaling
Publication 517 (2017)
Form W-2 From College
The community college gave Rev. White a
Form W-2 that showed the following.
Box 2. The college withheld $272 in federal income tax on Rev. White's behalf.
Boxes 3 and 5. As an employee of the college, Rev. White is subject to social security
and Medicare withholding on his full $3,400 salary from the college.
Box 4. The college withheld $210.80 in social
security taxes.
Line 2. Rev. White reports his expenses related to the line 1 amount. He paid $87 for marriage and family booklets and drove his car 490
miles for business, mainly in connection with
honoraria. Rev. White used the standard mileage rate to figure his car expense, as follows.
490 miles × 53.5 cents ($0.535) =
$262
These expenses total $349 ($262 + $87). However, he can't deduct the part of his expenses
allocable to his tax-free parsonage allowance.
First, Rev. White uses Worksheet 1 to figure
his percentage of tax-free income. Then he
completes Worksheet 2 (see Attachment 1,
Worksheet 2, later) to show that 23% or $80
($349 × 23% (0.23)) of his business expenses
aren't deductible because they are allocable to
his tax-free allowance. He subtracts the $80
from the $349, enters the $269 difference on
line 2, and adds a note at the bottom of the
schedule to see the attached statement.
Rev. White attaches Worksheets 1 and 2 to
his return. This is part of his required statement.
See Attachment 1, later.
Line 3. Rev. White enters his net profit of
$3,731 ($4,000 − $269) on line 3 and on Form
1040, line 12.
Lines 4 through 8b. Rev. White fills out these
lines to report information about his car.
Form 2106-EZ
Rev. White fills out Form 2106-EZ to report the
unreimbursed business expenses he had as a
common-law employee of First United Church.
Line 1. Before completing line 1, Rev. White
fills out Part II because he used his car for
church business. His records show that he
drove 2,774 business miles, which he reports in
Part II. Then, he figures his car expense for his
line 1 entry.
2,774 miles × 53.5 cents ($0.535) =
$1,484
Line 4. He enters $231 for his professional
publications and booklets.
Line 6. Before entering the total expenses on
line 6, Rev. White must reduce them by the
amount allocable to his tax-free parsonage allowance. After completing Worksheet 3 (see Attachment 1, later), he finds that $394 (($1,484 +
$231) × 23% (0.23)) of his employee business
expenses aren't deductible. He subtracts $394
from $1,715 ($1,484 + $231) and enters the result, $1,321, on line 6, adding a note at the bottom of the page about the attached statement.
He also enters $1,321 on Schedule A (Form
1040), line 21.
Box 6. The college withheld $49.30 in Medicare taxes.
Schedule A (Form 1040)
Schedule C-EZ (Form 1040)
Rev. White fills out Schedule A as explained
here.
Some of Rev. White's entries on Schedule C-EZ are explained here.
Line 5. He deducts $925 for state and local
general sales taxes paid during 2017. Because
he has accurate records, he uses his actual expenses and doesn't need to complete the State
and Local General Sales Tax Deduction
Line 1. Rev. White reports the $4,000 from
weddings, baptisms, and honoraria.
Page 13
Worksheet and consult the Optional State and
Local Sales Tax Tables in the Schedule A
(Form 1040) instructions.
Line 4. He multiplies $43,736 by 92.35%
(0.9235) to get his net earnings from self-employment ($40,390).
Line 6. He deducts $1,800 in real estate taxes
paid in 2017.
Line 5. The amount on line 4 is less than
$127,200, so Rev. White multiplies the amount
on line 4 ($40,390) by 15.3% (0.153) to get his
self-employment tax of $6,180. He enters that
amount here and on Form 1040, line 57.
Line 10. He deducts $5,572 of home mortgage
interest paid in 2017 (reported on Form 1098,
Mortgage Interest Statement (not shown)).
Line 16. Rev. and Mrs. White contributed
$4,800 in cash during the year to various qualifying charities. Each individual contribution was
less than $250 and they have the required records for all donations.
Line 21. Rev. White enters his $1,321 of unreimbursed employee business expenses from
Form 2106-EZ, line 6.
Lines 25, 26, and 27. He can deduct only the
part of his employee business expenses that
exceeds 2% of his adjusted gross income. After
he completes page 1 of Form 1040, he fills out
these lines to figure the amount he can deduct.
Line 29. The total of all the Whites' itemized
deductions is $13,712, which he enters here
and on Form 1040, line 40.
Schedule SE (Form 1040)
After Rev. White prepares Schedule C-EZ and
Form 2106-EZ, he fills out Schedule SE (Form
1040). He reads the chart on page 1 of the
schedule and determines that he can use Section A—Short Schedule SE to figure his
self-employment tax. Rev. White is a minister,
so his salary from the church isn't considered
church employee income. Thus, he doesn't
have to use Section B—Long Schedule SE. He
fills out the following lines in Section A.
Line 2. Rev. White attaches a statement (see
Attachment 2, Worksheet 4, later) that explains
how he figures the amount ($43,736) to enter
on line 2, and adds a note at the bottom of the
page to see the attached statement.
Page 14
Line 6. Rev. White multiplies the amount on
line 5 by 50% (0.50) to get his deduction for the
employer-equivalent portion of self-employment
tax of $3,090. He enters that amount here and
on Form 1040, line 27.
Form 1040
After Rev. White prepares Form 2106-EZ and
the other schedules, he fills out Form 1040. He
files a joint return with his wife. First, he fills out
the address area and completes the appropriate lines for his filing status and exemptions.
Then, he fills out the rest of the form as follows.
Line 7. Rev. White reports $34,640. This
amount is the total of his $31,000 church salary,
$3,400 college salary, and $240 ($1,200 –
$960), his excess utility allowance. He enters
“Excess allowance $240” on the dotted line next
to line 7 as directed under Excess rental allowance, earlier. His employers reported the two
salaries to him in box 1 of the Forms W-2 he received.
Line 12. He reports his net profit of $3,731
from Schedule C-EZ, line 3.
Line 27. He enters $3,090, the deductible part
of his SE tax from Schedule SE, line 6.
Line 40. He enters $13,712, the total itemized
deductions from Schedule A, line 29.
Line 52. The Whites can take the child tax
credit for their daughter, Jennifer. Rev. White
figures the credit by completing the Child Tax
Credit Worksheet (not shown) in the Instruc-
tions for Form 1040. He enters the $943 credit
on line 52.
Line 57. He enters $6,180, the self-employment tax from Schedule SE, line 5.
Line 61. Rev. White checks the box and
leaves the entry space blank because he, his
wife, and daughter had qualifying health coverage for all of 2017.
Line 64. He enters $272, the federal income
tax withheld, as shown in box 2 of his Form W-2
from the college.
Line 65. He enters the $7,000 estimated tax
payments he made for the year.
Line 66a. Rev. White completes Steps 1
through 5 of the instructions for lines 66a and
66b to see if he can claim the EIC. As instructed
under Clergy following Step 6, he writes
“Clergy” on the dotted line next to line 66a. He
then completes Worksheet B (not illustrated) in
the instructions and finds that he qualifies for an
EIC of $189. He enters $189 on line 66a and attaches Schedule EIC as directed by line 11 of
Worksheet B.
Line 67. Rev. White enters $57 from Schedule
8812 (not illustrated).
Line 77. He wants to have any overpayment of
tax applied to his 2018 estimated tax.
Attachment 1
Attachment 1 (Worksheets 1, 2, and 3) shows
the computation of expenses that are nondeductible because they are allocable to tax-free
ministerial income and the deductions allowed.
Attachment 2
Attachment 2 (Worksheet 4) shows the computation of net self-employment income.
Publication 517 (2017)
Rev. White’s Forms W-2
a Employee’s social security number
22222
011-00-2222
OMB No. 1545-0008
b Employer identification number (EIN)
Safe, accurate,
FAST! Use
1 Wages, tips, other compensation
00-0246810
First United Church
1042 Main Street
Hometown, TX 77099
3 Social security wages
4 Social security tax withheld
5 Medicare wages and tips
6 Medicare tax withheld
7 Social security tips
8 Allocated tips
9 Verification code
d Control number
e Employee’s first name and initial
13
John E. White
1040 Main Street
Hometown, TX 77099
W-2
Statutory
employee
Retirement
plan
12a See instructions for box 12
C
o
d
e
Third-party
sick pay
Parsonage Allowance
9600.00
Utilities Allowance
1200.00
16 State wages, tips, etc.
Wage and Tax
Statement
17 State income tax
12b
C
o
d
e
12c
14 Other
f Employee’s address and ZIP code
Form
10 Dependent care benefits
Suff. 11 Nonqualified plans
Last name
Employer’s state ID number
2 Federal income tax withheld
31000.00
c Employer’s name, address, and ZIP code
15 State
Visit the IRS website at
www.irs.gov/efile
18 Local wages, tips, etc.
C
o
d
e
12d
C
o
d
e
19 Local income tax
20 Locality name
Department of the Treasury—Internal Revenue Service
2017
Copy B—To Be Filed With Employee’s FEDERAL Tax Return.
This information is being furnished to the Internal Revenue Service.
a Employee’s social security number
22222
011-00-2222
OMB No. 1545-0008
b Employer identification number (EIN)
Safe, accurate,
FAST! Use
Visit the IRS website at
www.irs.gov/efile
1 Wages, tips, other compensation
00-1357913
c Employer’s name, address, and ZIP code
272.00
3 Social security wages
4 Social security tax withheld
3400.00
Hometown College
40 Honor Road
Hometown, TX 77099
210.80
5 Medicare wages and tips
6 Medicare tax withheld
3400.00
49.30
7 Social security tips
8 Allocated tips
9 Verification code
d Control number
e Employee’s first name and initial
2 Federal income tax withheld
3400.00
10 Dependent care benefits
Suff. 11 Nonqualified plans
Last name
13
John E. White
1040 Main Street
Hometown, TX 77099
Statutory
employee
Retirement
plan
12a See instructions for box 12
C
o
d
e
Third-party
sick pay
12b
C
o
d
e
12c
14 Other
C
o
d
e
12d
C
o
d
e
f Employee’s address and ZIP code
15 State
Form
Employer’s state ID number
W-2
Wage and Tax
Statement
16 State wages, tips, etc.
17 State income tax
2017
18 Local wages, tips, etc.
19 Local income tax
20 Locality name
Department of the Treasury—Internal Revenue Service
Copy B—To Be Filed With Employee’s FEDERAL Tax Return.
This information is being furnished to the Internal Revenue Service.
Publication 517 (2017)
Page 15
Form
Rev. White’s Filled-in Form 1040, page 1
1040
2017
(99)
Department of the Treasury—Internal Revenue Service
U.S. Individual Income Tax Return
For the year Jan. 1–Dec. 31, 2017, or other tax year beginning
Your first name and initial
OMB No. 1545-0074
, 2017, ending
IRS Use Only—Do not write or staple in this space.
See separate instructions.
, 20
Your social security number
Last name
John E.
White
Susan R.
White
Apt. no.
Home address (number and street). If you have a P.O. box, see instructions.
City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions).
Check only one
box.
Exemptions
2
3
6a
b
c
Attach Form(s)
W-2 here. Also
attach Forms
W-2G and
1099-R if tax
was withheld.
If you did not
get a W-2,
see instructions.
Adjusted
Gross
Income
1111
Head of household (with qualifying person). (See instructions.)
If the qualifying person is a child but not your dependent, enter this
√ Spouse
.
Dependents:
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
(2) Dependent’s
social security number
(3) Dependent’s
relationship to you
(4) ✓ if child under age 17
qualifying for child tax credit
(see instructions)
111 00 1113
daughter
√
Last name
}
on 6a and 6b
No. of children
on 6c who:
• lived with you
• did not live with
you due to divorce
or separation
(see instructions)
2
1
Dependents on 6c
not entered above
Total number of exemptions claimed
.
.
.
.
.
.
7
Wages, salaries, tips, etc. Attach Form(s) W-2
.
.
.
8a
b
9a
Taxable interest. Attach Schedule B if required .
Tax-exempt interest. Do not include on line 8a .
Ordinary dividends. Attach Schedule B if required
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Excess
. . .allowance
. . . $240
. .
.
.
.
.
7
.
.
.
.
.
.
.
8a
.
.
.
.
.
.
.
9a
10
11
Qualified dividends . . . . . . . . . . .
9b
Taxable refunds, credits, or offsets of state and local income taxes
Alimony received . . . . . . . . . . . . . . .
.
.
.
.
.
.
.
.
.
.
.
.
10
11
12
13
14
Business income or (loss). Attach Schedule C or C-EZ . . . . . . . . .
Capital gain or (loss). Attach Schedule D if required. If not required, check here ▶
Other gains or (losses). Attach Form 4797 . . . . . . . . . . . . .
.
12
13
14
15a
16a
17
IRA distributions .
15a
b Taxable amount
. . .
Pensions and annuities 16a
b Taxable amount
. . .
Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
15b
16b
17
18
19
20a
Farm income or (loss). Attach Schedule F .
Unemployment compensation . . . .
Social security benefits 20a
18
19
20b
21
22
Other income. List type and amount
Combine the amounts in the far right column for lines 7 through 21. This is your total income
23
Educator expenses
24
Certain business expenses of reservists, performing artists, and
fee-basis government officials. Attach Form 2106 or 2106-EZ
25
Health savings account deduction. Attach Form 8889
.
24
25
26
27
28
Moving expenses. Attach Form 3903 . . . . . .
Deductible part of self-employment tax. Attach Schedule SE .
Self-employed SEP, SIMPLE, and qualified plans
. .
26
27
28
29
30
31a
Self-employed health insurance deduction
Penalty on early withdrawal of savings . .
.
.
.
.
.
.
.
.
32
33
34
Alimony paid b Recipient’s SSN
IRA deduction . . . . . .
Student loan interest deduction .
Reserved for future use . . .
29
30
31a
.
.
.
.
.
.
.
.
.
.
.
.
32
33
34
35
36
37
Domestic production activities deduction. Attach Form 8903
35
Add lines 23 through 35 . . . . . . . . . . . . .
Subtract line 36 from line 22. This is your adjusted gross income
b
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
▶
.
.
.
.
.
.
.
.
.
.
.
8b
. .
. . . . . .
. . . . . .
b Taxable amount
.
.
.
.
.
.
.
.
.
.
▶
21
22
Add numbers on
lines above ▶
3
34,640
3,731
38,371
23
3,090
.
.
For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.
Page 16
00
Make sure the SSN(s) above
and on line 6c are correct.
child’s name here. ▶
Married filing separately. Enter spouse’s SSN above
and full name here. ▶
5
Qualifying widow(er) (see instructions)
√ Yourself. If someone can claim you as a dependent, do not check box 6a . . . . .
Boxes checked
Jennifer White
d
Income
4
Single
√ Married filing jointly (even if only one had income)
(1) First name
If more than four
dependents, see
instructions and
check here ▶
011
Check here if you, or your spouse if filing
jointly, want $3 to go to this fund. Checking
Foreign postal code
a box below will not change your tax or
refund.
√ You √ Spouse
Foreign province/state/county
1
2222
Presidential Election Campaign
Hometown, TX 77099
Filing Status
00
▲
1040 Main Street
Foreign country name
011
Spouse’s social security number
Last name
If a joint return, spouse’s first name and initial
.
.
.
.
.
.
.
.
.
▶
36
37
Cat. No. 11320B
3,090
35,281
Form 1040
(2017)
Publication 517 (2017)
Rev. White’s Filled-in Form 1040, page 2
Page 2
Form 1040 (2017)
38
Amount from line 37 (adjusted gross income)
Tax and
Credits
39a
Check
if:
If your spouse itemizes on a separate return or you were a dual-status alien, check here ▶
39b
Standard
Deduction
for—
• People who
check any
box on line
39a or 39b or
who can be
claimed as a
dependent,
see
instructions.
• All others:
Single or
Married filing
separately,
$6,350
Married filing
jointly or
Qualifying
widow(er),
$12,700
Head of
household,
$9,350
40
41
Itemized deductions (from Schedule A) or your standard deduction (see left margin)
Subtract line 40 from line 38
. . . . . . . . . . . . . . . . .
.
.
42
43
Exemptions. If line 38 is $156,900 or less, multiply $4,050 by the number on line 6d. Otherwise, see instructions
Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- . .
Form 4972 c
Tax (see instructions). Check if any from: a
Form(s) 8814 b
Other
Taxes
58
59
60a
b
44
45
46
47
48
49
50
51
52
53
54
55
56
57
.
.
.
.
Blind.
Blind.
.
.
.
.
.
.
67
68
69
70
71
72
.
}
.
.
a
.
.
.
.
.
.
.
.
48
.
.
.
.
.
.
.
.
.
.
▶
.
.
.
.
.
.
.
.
.
.
.
.
.
.
▶
.
Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required
.
.
.
.
.
.
. . . .
Instructions; enter code(s)
. . . . . . . . . . .
64
Federal income tax withheld from Forms W-2 and 1099 . .
272
2017 estimated tax payments and amount applied from 2016 return
65
7,000
Earned income credit (EIC) . . . Clergy
. . . . . . . 66a
189
.
.
.
.
.
.
.
.
.
.
.
.
.
Full-year coverage √
.
.
.
67
American opportunity credit from Form 8863, line 8 .
Net premium tax credit. Attach Form 8962 . . . .
Amount paid with request for extension to file . . .
.
.
.
.
.
.
68
69
70
.
b
4137
First-time homebuyer credit repayment. Attach Form 5405 if required
Nontaxable combat pay election
66b
Additional child tax credit. Attach Schedule 8812 .
.
.
.
.
.
.
.
.
.
.
13,712
21,569
12,150
9,419
943
43
44
45
46
47
943
.
.
.
.
943
-06,180
55
56
57
58
59
60a
60b
61
62
▶
63
6,180
▶
74
7,518
1,338
5752
71
72
Credits from Form: a
2439 b
Reserved c
8885 d
73
Add lines 64, 65, 66a, and 67 through 73. These are your total payments .
Excess social security and tier 1 RRTA tax withheld
40
41
42
943
.
.
35,281
49
50
51
.
.
38
Total boxes
checked ▶ 39a
.
Credit for federal tax on fuels. Attach Form 4136
75
76a
.
8919
Household employment taxes from Schedule H
.
.
.
.
.
.
.
.
.
Self-employment tax. Attach Schedule SE
.
.
.
.
.
.
Unreported social security and Medicare tax from Form:
.
.
.
52
Residential energy credit. Attach Form 5695 . . . . .
53
3800 b
8801 c
Other credits from Form: a
54
Add lines 48 through 54. These are your total credits . . . . .
Subtract line 55 from line 47. If line 55 is more than line 47, enter -0-
Health care: individual responsibility (see instructions)
Form 8960 c
Taxes from: a
Form 8959 b
Add lines 56 through 62. This is your total tax . .
64
65
66a
b
.
.
.
.
.
.
If line 74 is more than line 63, subtract line 63 from line 74. This is the amount you overpaid
75
Amount of line 75 you want refunded to you. If Form 8888 is attached, check here
. ▶
76a
▶ c Type:
Routing number
Checking
Savings
Account number
Amount of line 75 you want applied to your 2018 estimated tax ▶ 77
77
1,338
78
Amount you owe. Subtract line 74 from line 63. For details on how to pay, see instructions ▶ 78
79
Estimated tax penalty (see instructions) . . . . . . .
79
Do you want to allow another person to discuss this return with the IRS (see instructions)?
Yes. Complete below.
▶
Direct deposit?
See
▶
instructions.
Third Party
Designee
.
Credit for child and dependent care expenses. Attach Form 2441
73
74
Amount
You Owe
.
Education credits from Form 8863, line 19 . . . . .
Retirement savings contributions credit. Attach Form 8880
Child tax credit. Attach Schedule 8812, if required . . .
62
63
Refund
.
You were born before January 2, 1953,
Spouse was born before January 2, 1953,
Add lines 44, 45, and 46
. . . . . . .
Foreign tax credit. Attach Form 1116 if required .
61
If you have a
qualifying
child, attach
Schedule EIC.
.
Alternative minimum tax (see instructions). Attach Form 6251 .
Excess advance premium tax credit repayment. Attach Form 8962
b
Payments
{
.
b
d
√ No
Personal identification
▶
number (PIN)
Phone
no. ▶
Designee’s
name ▶
Sign
Here
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and
accurately list all amounts and sources of income I received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.
Joint return? See
instructions.
Keep a copy for
your records.
▲
Paid
Preparer
Use Only
Your signature
Date
3/1/2018
John E. White
Spouse’s signature. If a joint return, both must sign.
Susan R. White
Print/Type preparer’s name
Firm’s name
Date
3/1/2018
Preparer’s signature
Your occupation
Daytime phone number
Minister
Spouse’s occupation
Homemaker
Date
If the IRS sent you an Identity Protection
PIN, enter it
here (see inst.)
PTIN
Check
if
self-employed
▶
Firm’s EIN
Firm’s address ▶
Phone no.
Go to www.irs.gov/Form1040 for instructions and the latest information.
Publication 517 (2017)
▶
Form 1040 (2017)
Page 17
Rev. White’s Filled-in Schedule A (Form 1040)
SCHEDULE A
(Form 1040)
OMB No. 1545-0074
Itemized Deductions
Department of the Treasury
Internal Revenue Service (99)
▶ Go
2017
to www.irs.gov/ScheduleA for instructions and the latest information.
▶ Attach to Form 1040.
Attachment
Sequence No. 07
Your social security number
Name(s) shown on Form 1040
John E. White and Susan R. White
Medical
and
Dental
Expenses
Taxes You
Paid
1
2
3
4
5
6
7
8
Interest
You Paid
9
10
11
Note:
Your mortgage
interest
deduction may
be limited (see
instructions).
011-00-2222
Caution: Do not include expenses reimbursed or paid by others.
Medical and dental expenses (see instructions) . . . . .
1
Enter amount from Form 1040, line 38
2
3
Multiply line 2 by 10% (0.10) . . . . . . . . . . . .
Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . .
State and local (check only one box):
a
Income taxes, or
. . . . . . . . . . .
5
b √ General sales taxes
Real estate taxes (see instructions) . . . . . . . . .
6
Personal property taxes . . . . . . . . . . . . .
7
Other taxes. List type and amount ▶
8
Add lines 5 through 8 . . . . . . . . . . . . . . . .
Home mortgage interest and points reported to you on Form 1098 10
Home mortgage interest not reported to you on Form 1098. If paid
to the person from whom you bought the home, see instructions
and show that person’s name, identifying no., and address ▶
.
.
.
.
}
11
12 Points not reported to you on Form 1098. See instructions for
special rules . . . . . . . . . . . . . . . . .
12
13 Reserved . . . . . . . . . . . . . . . . . .
13
14 Investment interest. Attach Form 4952 if required. See instructions.
14
15 Add lines 10 through 14 . . . . . . . . . . . . . . .
Gifts to
16 Gifts by cash or check. If you made any gift of $250 or more,
see instructions . . . . . . . . . . . . . . . .
16
Charity
17
Other
than
by
cash
or
check.
If
any
gift
of
$250
or
more,
see
If you made a
gift and got a
instructions. You must attach Form 8283 if over $500 . . .
17
benefit for it,
18 Carryover from prior year . . . . . . . . . . . .
18
see instructions.
19 Add lines 16 through 18 . . . . . . . . . . . . . . .
.
.
4
925
1,800
.
.
.
.
.
.
9
2,725
15
5,572
19
4,800
5,572
.
.
.
.
.
.
4,800
.
.
.
.
.
.
Casualty and
Theft Losses 20 Casualty or theft loss(es). Attach Form 4684. See instructions . . . . . . . .
Job Expenses 21 Unreimbursed employee expenses—job travel, union dues,
and Certain
job education, etc. Attach Form 2106 or 2106-EZ if required.
Miscellaneous
21
1,321
See instructions. ▶
Deductions
22 Tax preparation fees . . . . . . . . . . . . .
22
20
23 Other expenses—investment, safe deposit box, etc. List type
and amount ▶
Other
Miscellaneous
Deductions
24
25
26
27
28
23
Add lines 21 through 23 . . . . . . . . . . . .
24
35,281
Enter amount from Form 1040, line 38 25
Multiply line 25 by 2% (0.02) . . . . . . . . . .
26
Subtract line 26 from line 24. If line 26 is more than line 24, enter -0- .
Other—from list in instructions. List type and amount ▶
1,321
706
.
.
.
.
27
615
28
29 Is Form 1040, line 38, over $156,900?
Total
√ No. Your deduction is not limited. Add the amounts in the far right column
Itemized
for lines 4 through 28. Also, enter this amount on Form 1040, line 40.
Deductions
}
.
Yes. Your deduction may be limited. See the Itemized Deductions
Worksheet in the instructions to figure the amount to enter.
30 If you elect to itemize deductions even though they are less than your standard
deduction, check here . . . . . . . . . . . . . . . . . . . ▶
For Paperwork Reduction Act Notice, see the Instructions for Form 1040.
Page 18
.
Cat. No. 17145C
.
29
13,712
Schedule A (Form 1040) 2017
Publication 517 (2017)
Rev. White’s Filled-in Schedule C-EZ (Form 1040)
Net Profit From Business
SCHEDULE C-EZ
(Form 1040)
OMB No. 1545-0074
2017
2013
(Sole Proprietorship)
▶
Department of the Treasury
Internal Revenue Service (99)
Name of proprietor
Partnerships, joint ventures, etc., generally must file Form 1065 or 1065-B.
▶ See
▶
See instructions
instructions on
on page
page 2.
2.
Attachment
Sequence No. 09A
Social security number (SSN)
▶
▶ Attach
Attach to
to Form
Form 1040,
1040, 1040NR,
1040NR, or
or 1041.
1041.
John E. White
Part I
011-00-2222
General Information
▶ • Had business expenses of $5,000 or
▶
• Had business expenses of $5,000 or
A
• Had no employees during the year,
year.
Do not
expenses
for business
• Are
not deduct
required
to file Form
4562,
Depreciation
and Amortization, for
use
of your home,
business.
Seeyear
the instructions
• this
Do not
have prior
unallowed for
Schedule
C, linelosses
13, to from
find out
passive activity
thisif you
must
file. and
business,
•• Do
expenses
for business
Are not
not deduct
required
to file Form
4562,
use
of your home.
Depreciation
and Amortization, for
business.
Seeyear
the instructions
• this
Do not
have prior
unallowed for
Schedule
C, linelosses
13, to from
find out
passive activity
thisif you
must
file.
business.
▶ ▶
less.less,
• Use
the cash
method
of accounting.
• Use
the cash
method
of accounting,
You May Use
You MayC-EZ
Use
Schedule
Schedule
Instead
of C-EZ
Instead of
Schedule
C
Schedule
Only
If You:C
Only If You:
• Did• not
an inventory
at any
timetime
Did have
not have
an inventory
at any
during
the year.
during
the year,
• Did• not
a neta loss
fromfrom
youryour
Did have
not have
net loss
business.
business,
• Had
onlyonly
one one
business
as either
a sole
• Had
business
as either
a sole
proprietor,
qualified
jointjoint
venture,
or or
proprietor,
qualified
venture,
statutory
employee.
statutory
employee,
And You:
And You:
B Enter business code (see page 2)
Principal business or profession, including product or service
▶ 5 4 1 9 9 0
Minister
D Enter your EIN (see page 2)
C Business name. If no separate business name, leave blank.
E
Business address (including suite or room no.). Address not required if same as on page 1 of your tax return.
1042 Main Street
City, town or post office, state, and ZIP code
Hometown, TX 77099
Did you make any payments in 2017
2013 that would require you to file Form(s) 1099? (see the Instructions
Schedule C for
Schedule
C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
instructions)
F
G If “Yes,” did you or will you file required Forms 1099? .
Part II
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Yes
Yes
.
√ No
No
Figure Your Net Profit
Gross receipts. Caution.
Caution: If this income was reported to you on Form W-2 and the “Statutory
employees in the instructions for
employee” box on that form was checked, see Statutory Employees
Schedule C, line 1, and check here . . . . . . . . . . . . . . . . . . ▶
1
4,000
2
Total expenses (see page 2). If more than $5,000, you must use Schedule C
.
2
269*
3
Net profit. Subtract line 2 from line 1. If less than zero, you must use Schedule C. Enter on both
13,and
andSchedule
ScheduleSE,
SE,
Form 1040, line 12, and Schedule SE, line 2, or on Form 1040NR, line 13
(seeinstructions).
page 2). (Statutory
employees
do do
notnot
report
this
line 22 (see
(Statutory
employees,
report
thisamount
amounton
onSchedule
ScheduleSE,
SE, line
line 2.)
Estates and trusts, enter on Form 1041, line 3 . . . . . . . . . . . . . . . . .
3
3,731
1
Part III
.
.
.
.
.
.
Information on Your Vehicle. Complete this part only if you are claiming car or truck expenses on line 2.
4
When did you place your vehicle in service for business purposes? (month, day, year)
5
Of the total number of miles you drove your vehicle during 2017,
2013, enter the number of miles you used your vehicle for:
a
Business
490
-0-
b Commuting (see page 2)
7/15/2013
▶
c
Other
.
7,247
6
Was your vehicle available for personal use during off-duty hours? .
.
.
.
.
.
.
.
.
.
.
.
√ Yes
No
7
Do you (or your spouse) have another vehicle available for personal use? .
.
.
.
.
.
.
.
.
.
.
√ Yes
No
8a
Do you have evidence to support your deduction?
.
.
.
.
.
.
.
.
.
√ Yes
No
.
.
.
.
.
.
.
.
.
√ Yes
No
b If “Yes,” is the evidence written? .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
For Paperwork
ActAct
Notice,
seesee
the the
separate
instructions
for Schedule
C (Form
For
PaperworkReduction
Reduction
Notice,
separate
instructions
for Schedule
C 1040).
(Form 1040).
Cat.Cat.
No.No.
14374D
14374D
2013
Schedule C-EZ (Form 1040) 2017
*See attached statement.
Publication 517 (2017)
Page 19
Rev. White’s Filled-in Schedule SE (Form 1040)
SCHEDULE SE
(Form 1040)
OMB No. 1545-0074
Self-Employment Tax
▶
Department of the Treasury
Internal Revenue Service (99)
2017
Go to www.irs.gov/ScheduleSE for instructions and the latest information.
▶ Attach to Form 1040 or Form 1040NR.
Name of person with self-employment income (as shown on Form 1040 or Form 1040NR)
John E. White
Attachment
Sequence No. 17
Social security number of person
with self-employment income ▶
011-00-2222
Before you begin: To determine if you must file Schedule SE, see the instructions.
May I Use Short Schedule SE or Must I Use Long Schedule SE?
Note: Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions.
Did you receive wages or tips in 2017?
No
▼
Yes
▼
▼
Are you a minister, member of a religious order, or Christian
Science practitioner who received IRS approval not to be taxed
on earnings from these sources, but you owe self-employment
tax on other earnings?
Yes
Was the total of your wages and tips subject to social security
or railroad retirement (tier 1) tax plus your net earnings from
self-employment more than $127,200?
▶
No
Yes
Did you receive tips subject to social security or Medicare tax
that you didn't report to your employer?
▶
Yes
▶
No
▼
No
▼
Did you receive church employee income (see instructions)
reported on Form W-2 of $108.28 or more?
▶
No
▼
▼
Are you using one of the optional methods to figure your net
earnings (see instructions)?
Yes
Yes
▶
◀
No
Did you report any wages on Form 8919, Uncollected Social
Security and Medicare Tax on Wages?
Yes
▶
No
▼
You may use Short Schedule SE below
▼
▶
You must use Long Schedule SE on page 2
Section A—Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE.
1a
Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form
1065), box 14, code A . . . . . . . . . . . . . . . . . . . . . . . .
b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve
Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code Z
2
3
4
5
6
Net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065),
box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1.
Ministers and members of religious orders, see instructions for types of income to report on
this line. See instructions for other income to report . . . . . . . . . . . . . .
Combine lines 1a, 1b, and 2
. . . . . . . . . . . . . . . . . . . . .
Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax; don't
file this schedule unless you have an amount on line 1b . . . . . . . . . . . . . ▶
Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b,
see instructions.
Self-employment tax. If the amount on line 4 is:
• $127,200 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Form 1040, line
57, or Form 1040NR, line 55
• More than $127,200, multiply line 4 by 2.9% (0.029). Then, add $15,772.80 to the result.
Enter the total here and on Form 1040, line 57, or Form 1040NR, line 55 . . . . . . .
Deduction for one-half of self-employment tax.
Multiply line 5 by 50% (0.50). Enter the result here and on Form
1040, line 27, or Form 1040NR, line 27 . . . . . . . .
3,090
6
For Paperwork Reduction Act Notice, see your tax return instructions.
Cat. No. 11358Z
1a
1b (
)
2
3
43,736*
43,736
4
40,390
5
6,180
Schedule SE (Form 1040) 2017
*See attached statement.
Page 20
Publication 517 (2017)
Rev. White’s Filled-in Schedule EIC (Form 1040)
SCHEDULE EIC
Earned Income Credit
(Form 1040A or 1040)
1040A
Qualifying Child Information
▶
..........
Complete and attach to Form 1040A or 1040 only if you have a qualifying child.
OMB No. 1545-0074
◀
2017
1040
EIC
Department of the Treasury ▶
Go to www.irs.gov/ScheduleEIC for the latest information.
Internal Revenue Service (99)
Name(s) shown on return
Attachment
Sequence No. 43
Your social security number
John E. and Susan R. White
Before you begin:
!
▲
CAUTION
011-00-2222
• See the instructions for Form 1040A, lines 42a and 42b, or Form 1040, lines 66a and 66b, to make
sure that (a) you can take the EIC, and (b) you have a qualifying child.
• Be sure the child’s name on line 1 and social security number (SSN) on line 2 agree with the child’s social security card.
Otherwise, at the time we process your return, we may reduce or disallow your EIC. If the name or SSN on the child’s
social security card is not correct, call the Social Security Administration at 1-800-772-1213.
• You can't claim the EIC for a child who didn't live with you for more than half of the year.
• If you take the EIC even though you are not eligible, you may not be allowed to take the credit for up to 10 years. See the instructions for details.
• It will take us longer to process your return and issue your refund if you do not fill in all lines that apply for each qualifying child.
Qualifying Child Information
1 Child’s name
If you have more than three qualifying
children, you have to list only three to get
the maximum credit.
Child 1
Child 2
First name
Last name
Jennifer
White
First name
Child 3
Last name
First name
Last name
2 Child’s SSN
The child must have an SSN as defined in
the instructions for Form 1040A, lines 42a
and 42b, or Form 1040, lines 66a and 66b,
unless the child was born and died in
2017. If your child was born and died in
2017 and did not have an SSN, enter
“Died” on this line and attach a copy of
the child’s birth certificate, death
certificate, or hospital medical records.
3 Child’s year of birth
111-00-1113
2
Year
0
0
7
If born after 1998 and the child is
younger than you (or your spouse, if
filing jointly), skip lines 4a and 4b;
go to line 5.
4 a Was the child under age 24 at the end of
2017, a student, and younger than you (or
your spouse, if filing jointly)?
Yes.
Go to
line 5.
b Was the child permanently and totally
Yes.
disabled during any part of 2017?
Go to
line 5.
No.
Year
Year
If born after 1998 and the child is
younger than you (or your spouse, if
filing jointly), skip lines 4a and 4b;
go to line 5.
If born after 1998 and the child is
younger than you (or your spouse, if
filing jointly), skip lines 4a and 4b;
go to line 5.
Yes.
Go to line 4b.
No.
Go to
line 5.
Yes.
The child is not a
qualifying child.
Go to
line 5.
No.
Yes.
Go to line 4b.
No.
Go to
line 5.
Yes.
The child is not a
qualifying child.
Go to
line 5.
No.
Go to line 4b.
No.
The child is not a
qualifying child.
5 Child’s relationship to you
(for example, son, daughter, grandchild,
niece, nephew, foster child, etc.)
Daughter
6 Number of months child lived
with you in the United States
during 2017
• If the child lived with you for more than
half of 2017 but less than 7 months,
enter “7.”
• If the child was born or died in 2017 and
your home was the child’s home for more
than half the time he or she was alive
during 2017, enter “12.”
12
months
Do not enter more than 12
months.
For Paperwork Reduction Act Notice, see your tax
return instructions.
Publication 517 (2017)
months
Do not enter more than 12
months.
Cat. No. 13339M
months
Do not enter more than 12
months.
Schedule EIC (Form 1040A or 1040) 2017
Page 21
Rev. White’s Filled-in Form 2106-EZ
Form
2106-EZ
OMB No. 1545-0074
Unreimbursed Employee Business Expenses
2017
Attach to Form 1040 or Form 1040NR.
▶ Go to www.irs.gov/Form2106EZ for the latest information.
▶
Department of the Treasury
Internal Revenue Service (99)
Your name
Attachment
Sequence No.
Social security number
Occupation in which you incurred expenses
John E. White
011
Minister
00
129A
2222
You Can Use This Form Only if All of the Following Apply.
• You are an employee deducting ordinary and necessary expenses attributable to your job. An ordinary expense is one that is
common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for
your business. An expense doesn’t have to be required to be considered necessary.
• You don’t get reimbursed by your employer for any expenses (amounts your employer included in box 1 of your Form W-2 aren’t
considered reimbursements for this purpose).
• If you are claiming vehicle expense, you are using the standard mileage rate for 2017.
Caution: You can use the standard mileage rate for 2017 only if: (a) you owned the vehicle and used the standard mileage rate for the first year
you placed the vehicle in service, or (b) you leased the vehicle and used the standard mileage rate for the portion of the lease period after 1997.
Part I
Figure Your Expenses
1
Complete Part II. Multiply line 8a by 53.5¢ (0.535). Enter the result here
.
.
1
2
Parking fees, tolls, and transportation, including train, bus, etc., that didn’t involve overnight
travel or commuting to and from work . . . . . . . . . . . . . . . . . .
.
2
Travel expense while away from home overnight, including lodging, airplane, car rental, etc.
Don’t include meals and entertainment . . . . . . . . . . . . . . . . . .
.
3
4
Business expenses not included on lines 1 through 3. Don’t include meals and entertainment .
4
5
Meals and entertainment expenses: $
× 50% (0.50). (Employees subject to
Department of Transportation (DOT) hours of service limits: Multiply meal expenses incurred
while away from home on business by 80% (0.80) instead of 50%. For details, see instructions.)
5
Total expenses. Add lines 1 through 5. Enter here and on Schedule A (Form 1040), line 21 (or
on Schedule A (Form 1040NR), line 7). (Armed Forces reservists, fee-basis state or local
government officials, qualified performing artists, and individuals with disabilities: See the
instructions for special rules on where to enter this amount.) . . . . . . . . . . . .
6
3
6
Part II
.
.
.
.
.
.
1,484
231
1,321*
Information on Your Vehicle. Complete this part only if you are claiming vehicle expense on line 1.
7 /
15 / 2013
7
When did you place your vehicle in service for business use? (month, day, year)
8
Of the total number of miles you drove your vehicle during 2017, enter the number of miles you used your vehicle for:
a
Business
2,774
▶
-0-
b Commuting (see instructions)
c
4,963
Other
.
.
.
.
.
.
.
.
.
.
.
.
√ Yes
No
10
Do you (or your spouse) have another vehicle available for personal use? .
.
.
.
.
.
.
.
.
.
.
.
√ Yes
No
11a
Do you have evidence to support your deduction?
9
Was your vehicle available for personal use during off-duty hours? .
b If “Yes,” is the evidence written? .
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
√ Yes
No
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
√ Yes
No
For Paperwork Reduction Act Notice, see your tax return instructions.
Cat. No. 20604Q
Form 2106-EZ (2017)
*See attached statement.
Page 22
Publication 517 (2017)
Attachment 1—John E. White 011-00-2222
Worksheet 1. Figuring the Percentage of Tax-Free Income
Note. For each line, enter the appropriate amount in all boxes that aren't shaded.
(a)
Taxable
Source of Income
(b)
Tax-free
(c)
Total
1
W-2 salary as a minister (from box 1 of Form W-2)
1
31,000
31,000
2
Gross income from weddings, baptisms, writing, lecturing, etc. (from line 1 of
Schedule C or C-EZ)
2
4,000
4,000
Note. Complete either lines 3a through 3e or lines 4a through 4i.
• If your church provides you with a parsonage, complete lines 3a through 3e.
• If, instead of providing a parsonage, your church provides you with
a rental or parsonage allowance, complete lines 4a through 4i.
3a FRV* of parsonage provided by church
b Utility allowance, if any
3a
3b
c Actual expenses for utilities
3c
d Enter the smaller of line 3b or 3c
3d
e Excess utility allowance (subtract line 3d from line 3b)
3e
4a Parsonage or rental allowance
4a
9,600
b Utility allowance, if separate
4b
1,200
c Total allowance (add lines 4a and 4b)
4c
10,800
d Actual expenses for parsonage
4d
9,600
e Actual expenses for utilities
4e
960
Total actual expenses for parsonage and utilities (add lines 4d
f
and 4e)
4f
10,560
g FRV* of home, plus the cost of utilities
4g
10,800
h Enter the smaller of line 4c, 4f, or 4g
4h
i Excess allowance (subtract line 4h from line 4c)
5
6
Ministerial income (for columns (a), (b), and (c), add lines 1
through 4i)
Percentage of tax-free income: Total tax-free income (line 5(b)) $ 10,560
Total income (line 5(c)) $ 45,800
10,560
4i
240
5
35,240
10,560
240
10,560
=
45,800
23 %**
* FRV (Fair Rental Value): As determined objectively and between unrelated parties, what it would cost to rent a comparable home (including
furnishings) in a similar location.
** This percentage of your ministerial expenses won't be deductible. Use Worksheets 2 and 3 to figure your allowable deductions.
Publication 517 (2017)
Page 23
Attachment 1—John E. White 011-00-2222 (continued)
Worksheet 2. Figuring the Allowable Deduction for Schedule C or C-EZ Expenses
1
Percentage of expenses that are nondeductible (from Worksheet 1, line 6):
2
Business use of car for entire year:
3
Meals and entertainment: $
4
Other expenses (list item and amount)
a
490
23
%
miles x 53.5 cents ($0.535)
2
× 50% (0.50)
262
3
Marriage and family booklets
4a
b
4b
c
4c
d
4d
e
4e
f Total other expenses (add lines 4a through 4e)
87
4f
87
5
Total Schedule C or C-EZ expenses (add lines 2, 3, and 4f)
5
349
6
Nondeductible part of Schedule C or C-EZ expenses (multiply line 5 by the percent in line 1)
6
80
7
Deduction allowed.* Subtract line 6 from line 5. Enter the result here and on Schedule C, line 27a; or
Schedule C-EZ, line 2.
7
269
* None of the other deductions claimed in this return are allocable to tax-free income.
Worksheet 3. Figuring the Allowable Deduction for Form 2106 or 2106-EZ Expenses
Column A Column B
1
Percentage of expenses that are nondeductible (from Worksheet 1, line 6):
2
Use of car for church business for entire year:
3
Meals and entertainment
4
Other expenses (list item and amount)
a
2,774
23
%
miles x 53.5 cents ($0.535)
Professional publications and booklets
2
1,484
3
4a
b
4b
c
4c
d
4d
e
4e
231
5
Total expenses. In Column A, add lines 2 and 4a through 4e and enter the result. In Column B, enter the amount
from line 3.
5
6
Enter reimbursements received for other expenses (Column A) and meals and entertainment (Column B) that
were not included in box 1 of Form W-2
6
7
Total Form 2106 or 2106-EZ unreimbursed expenses (subtract line 6 from line 5)
7
1,715
8
In Column A, enter the amount from line 7. In Column B, multiply the amount from line 7B by 50% (0.50)
8
1,715
9
Add the amounts on line 8 of both columns and enter the total here
1,715
9
1,715
10 Nondeductible part of Form 2106 or 2106-EZ expenses (multiply line 9 by the percent in line 1)
10
394
11 Ministerial employee business expense deduction allowed.* Subtract line 10 from line 9. Enter the result
here and on Form 2106, line 10; or Form 2106-EZ, line 6.
11
1,321
* None of the other deductions claimed in this return are allocable to tax-free income.
Page 24
Publication 517 (2017)
Attachment 2—John E. White 011-00-2222
Worksheet 4. Figuring Net Self-Employment Income for Schedule SE (Form 1040)
1
W-2 salary as a minister (from box 1 of Form W-2)
1
2
Net profit from Schedule C, line 31; or Schedule C-EZ, line 3
2
3a
31,000
3,731
Parsonage or rental allowance (from Worksheet 1, line 3a or 4a)
3a
9,600
b
Utility allowance (from Worksheet 1, line 3b or 4b)
3b
1,200
c
Total allowance (add lines 3a and 3b)
3c
4
Add lines 1, 2, and 3c
4
5
Schedule C or C-EZ expenses allocable to tax-free income (from Worksheet 2, line 6)
5
80
6
Total unreimbursed employee business expenses after the 50% reduction for meals and
entertainment (from Worksheet 3, line 9)
6
1,715
7
Total business expenses not deducted in lines 1 and 2 above (add lines 5 and 6)
7
1,795
8
Net self-employment income. Subtract line 7 from line 4. Enter here and on Schedule SE,
Section A, line 2; or Section B, line 2.
8
43,736
Publication 517 (2017)
10,800
45,531
Page 25
Worksheets
These worksheets are provided to help you figure your taxable ministerial income, your allowable deductions, and your net self-employment income.
Worksheet 1. Figuring the Percentage of Tax-Free Income
Note. For each line, enter the appropriate amount in all boxes that aren't shaded.
(a)
Taxable
Source of Income
1
W-2 salary as a minister (from box 1 of Form W-2)
1
2
Gross income from weddings, baptisms, writing, lecturing, etc. (from line 1 of
Schedule C or C-EZ)
2
(b)
Tax-free
(c)
Total
Note. Complete either lines 3a through 3e or lines 4a through 4i.
• If your church provides you with a parsonage, complete lines 3a through 3e.
• If, instead of providing a parsonage, your church provides you with
a rental or parsonage allowance, complete lines 4a through 4i.
3a FRV* of parsonage provided by church
3a
b Utility allowance, if any
3b
c Actual expenses for utilities
3c
d Enter the smaller of line 3b or 3c
3d
e Excess utility allowance (subtract line 3d from line 3b)
3e
4a Parsonage or rental allowance
4a
b Utility allowance, if separate
4b
c Total allowance (add lines 4a and 4b)
4c
d Actual expenses for parsonage
4d
e Actual expenses for utilities
4e
f
Total actual expenses for parsonage and utilities (add lines 4d
and 4e)
4f
g FRV* of home, plus the cost of utilities
4g
h Enter the smaller of line 4c, 4f, or 4g
4h
i Excess allowance (subtract line 4h from line 4c)
5
6
Ministerial income (for columns (a), (b), and (c), add lines 1
through 4i)
Percentage of tax-free income: Total tax-free income (line 5(b)) $
Total income (line 5(c)) $
4i
5
=
%**
* FRV (Fair Rental Value): As determined objectively and between unrelated parties, what it would cost to rent a comparable home (including
furnishings) in a similar location.
** This percentage of your ministerial expenses won't be deductible. Use Worksheets 2 and 3 to figure your allowable deductions.
Page 26
Publication 517 (2017)
Worksheet 2. Figuring the Allowable Deduction for Schedule C or C-EZ Expenses
1
Percentage of expenses that are nondeductible (from Worksheet 1, line 6):
2
Business use of car for entire year:
3
Meals and entertainment: $
4
Other expenses (list item and amount)
%
miles x 53.5 cents ($0.535)
2
× 50% (0.50)
3
a
4a
b
4b
c
4c
d
4d
e
4e
f Total other expenses (add lines 4a through 4e)
4f
5
Total Schedule C or C-EZ expenses (add lines 2, 3, and 4f)
5
6
Nondeductible part of Schedule C or C-EZ expenses (multiply line 5 by the percent in line 1)
6
7
Deduction allowed.* Subtract line 6 from line 5. Enter the result here and on Schedule C, line 27a; or
Schedule C-EZ, line 2.
7
* None of the other deductions claimed in this return are allocable to tax-free income.
Worksheet 3. Figuring the Allowable Deduction for Form 2106 or 2106-EZ Expenses
Column A Column B
1
Percentage of expenses that are nondeductible (from Worksheet 1, line 6):
2
Use of car for church business for entire year:
3
Meals and entertainment
4
Other expenses (list item and amount)
%
miles x 53.5 cents ($0.535)
2
3
a
4a
b
4b
c
4c
d
4d
e
4e
5
Total expenses. In Column A, add lines 2 and 4a through 4e and enter the result. In Column B, enter the amount
from line 3.
5
6
Enter reimbursements received for other expenses (Column A) and meals and entertainment (Column B) that
were not included in box 1 of Form W-2
6
7
Total Form 2106 or 2106-EZ unreimbursed expenses (subtract line 6 from line 5)
7
8
In Column A, enter the amount from line 7. In Column B, multiply the amount from line 7B by 50% (0.50)
8
9
Add the amounts on line 8 of both columns and enter the total here
9
10 Nondeductible part of Form 2106 or 2106-EZ expenses (multiply line 9 by the percent in line 1)
10
11 Ministerial employee business expense deduction allowed.* Subtract line 10 from line 9. Enter the result
here and on Form 2106, line 10; or Form 2106-EZ, line 6.
11
* None of the other deductions claimed in this return are allocable to tax-free income.
Publication 517 (2017)
Page 27
Worksheet 4. Figuring Net Self-Employment Income for Schedule SE (Form 1040)
1
W-2 salary as a minister (from box 1 of Form W-2)
1
2
Net profit from Schedule C, line 31; or Schedule C-EZ, line 3
2
3a
Parsonage or rental allowance (from Worksheet 1, line 3a or 4a)
3a
b
Utility allowance (from Worksheet 1, line 3b or 4b)
3b
c
Total allowance (add lines 3a and 3b)
3c
4
Add lines 1, 2, and 3c
4
5
Schedule C or C-EZ expenses allocable to tax-free income (from Worksheet 2, line 6)
5
6
Total unreimbursed employee business expenses after the 50% reduction for meals and
entertainment (from Worksheet 3, line 9)
6
7
Total business expenses not deducted in lines 1 and 2 above (add lines 5 and 6)
7
8
Net self-employment income. Subtract line 7 from line 4. Enter here and on Schedule SE,
Section A, line 2; or Section B, line 2.
8
How To Get Tax Help
If you have questions about a tax issue, need
help preparing your tax return, or want to download free publications, forms, or instructions, go
to IRS.gov and find resources that can help you
right away.
Preparing and filing your tax return. Find
free options to prepare and file your return on
IRS.gov or in your local community if you qualify.
The Volunteer Income Tax Assistance
(VITA) program offers free tax help to people
who generally make $54,000 or less, persons
with disabilities, and limited-English-speaking
taxpayers who need help preparing their own
tax returns. The Tax Counseling for the Elderly
(TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of
age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.
You can go to IRS.gov to see your options
for preparing and filing your return which include the following.
Free File. Go to IRS.gov/FreeFile. See if
you qualify to use brand-name software to
prepare and e-file your federal tax return
for free.
VITA. Go to IRS.gov/VITA, download the
free IRS2Go app, or call 1-800-906-9887
to find the nearest VITA location for free
tax preparation.
TCE. Go to IRS.gov/TCE, download the
free IRS2Go app, or call 1-888-227-7669
to find the nearest TCE location for free tax
preparation.
Getting answers to your tax law
questions. On IRS.gov get answers to
your tax questions anytime, anywhere.
Go to IRS.gov/Help or IRS.gov/LetUsHelp
pages for a variety of tools that will help
you get answers to some of the most common tax questions.
Go to IRS.gov/ITA for the Interactive Tax
Assistant, a tool that will ask you questions
on a number of tax law topics and provide
answers. You can print the entire interview
and the final response for your records.
Go to IRS.gov/Pub17 to get Pub. 17, Your
Federal Income Tax for Individuals, which
Page 28
features details on tax-saving opportunities, 2017 tax changes, and thousands of
interactive links to help you find answers to
your questions. View it online in HTML, as
a PDF, or download it to your mobile device as an eBook.
You may also be able to access tax law information in your electronic filing software.
Getting tax forms and publications. Go to
IRS.gov/Forms to view, download, or print all of
the forms and publications you may need. You
can also download and view popular tax publications and instructions (including the 1040 instructions) on mobile devices as an eBook at no
charge. Or, you can go to IRS.gov/OrderForms
to place an order and have forms mailed to you
within 10 business days.
Access your online account (Individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax
account.
View the amount you owe, pay online or
set up an online payment agreement.
Access your tax records online.
Review the past 18 months of your payment history.
Go to IRS.gov/SecureAccess to review the
required identity authentication process.
Using direct deposit. The fastest way to receive a tax refund is to combine direct deposit
and IRS e-file. Direct deposit securely and electronically transfers your refund directly into your
financial account. Eight in 10 taxpayers use direct deposit to receive their refund. IRS issues
more than 90% of refunds in less than 21 days.
Delayed refund for returns claiming certain
credits. Due to changes in the law, the IRS
can’t issue refunds before mid-February 2018,
for returns that properly claimed the earned income credit (EIC) or the additional child tax
credit (ACTC). This applies to the entire refund,
not just the portion associated with these credits.
Getting a transcript or copy of a return. The
quickest way to get a copy of your tax transcript
is to go to IRS.gov/Transcripts. Click on either
"Get Transcript Online" or "Get Transcript by
Mail" to order a copy of your transcript. If you
prefer, you can:
Order your transcript by calling
1-800-908-9946.
Mail Form 4506-T or Form 4506T-EZ (both
available on IRS.gov).
Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.
The Earned Income Tax Credit Assistant
(IRS.gov/EIC) determines if you’re eligible
for the EIC.
The Online EIN Application (IRS.gov/EIN)
helps you get an employer identification
number.
The IRS Withholding Calculator (IRS.gov/
W4App) estimates the amount you should
have withheld from your paycheck for federal income tax purposes.
The First Time Homebuyer Credit Account
Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and
account balance.
The Sales Tax Deduction Calculator
(IRS.gov/SalesTax) figures the amount you
can claim if you itemize deductions on
Schedule A (Form 1040), choose not to
claim state and local income taxes, and
you didn’t save your receipts showing the
sales tax you paid.
Resolving tax-related identity theft issues.
The IRS doesn’t initiate contact with taxpayers by email or telephone to request
personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.
Go to IRS.gov/IDProtection for information
and videos.
If your SSN has been lost or stolen or you
suspect you’re a victim of tax-related identity theft, visit IRS.gov/ID to learn what
steps you should take.
Checking on the status of your refund.
Go to IRS.gov/Refunds.
Due to changes in the law, the IRS can’t issue refunds before mid-February 2018, for
returns that properly claimed the EIC or the
ACTC. This applies to the entire refund,
not just the portion associated with these
credits.
Download the official IRS2Go app to your
mobile device to check your refund status.
Publication 517 (2017)
Call the automated refund hotline at
1-800-829-1954.
Making a tax payment. The IRS uses the latest encryption technology to ensure your electronic payments are safe and secure. You can
make electronic payments online, by phone,
and from a mobile device using the IRS2Go
app. Paying electronically is quick, easy, and
faster than mailing in a check or money order.
Go to IRS.gov/Payments to make a payment
using any of the following options.
IRS Direct Pay: Pay your individual tax bill
or estimated tax payment directly from
your checking or savings account at no
cost to you.
Debit or credit card: Choose an approved payment processor to pay online,
by phone, and by mobile device.
Electronic Funds Withdrawal: Offered
only when filing your federal taxes using
tax preparation software or through a tax
professional.
Electronic Federal Tax Payment System: Best option for businesses. Enrollment is required.
Check or money order: Mail your payment to the address listed on the notice or
instructions.
Cash: You may be able to pay your taxes
at a participating retail store.
What if I can’t pay now? Go to IRS.gov/
Payments for more information about your options.
Apply for an online payment agreement
(IRS.gov/OPA) to meet your tax obligation
in monthly installments if you can’t pay
your taxes in full today. Once you complete
the online process, you will receive immediate notification of whether your agreement has been approved.
Use the Offer in Compromise Pre-Qualifier
(IRS.gov/OIC) to see if you can settle your
tax debt for less than the full amount you
owe.
Checking the status of an amended return.
Go to IRS.gov/WMAR to track the status of
Form 1040X amended returns. Please note that
it can take up to 3 weeks from the date you
mailed your amended return for it to show up in
our system and processing it can take up to 16
weeks.
Understanding an IRS notice or letter. Go to
IRS.gov/Notices to find additional information
about responding to an IRS notice or letter.
Publication 517 (2017)
Contacting your local IRS office. Keep in
mind, many questions can be answered on
IRS.gov without visiting an IRS Tax Assistance
Center (TAC). Go to IRS.gov/LetUsHelp for the
topics people ask about most. If you still need
help, IRS TACs provide tax help when a tax issue can’t be handled online or by phone. All
TACs now provide service by appointment so
you’ll know in advance that you can get the
service you need without long wait times. Before you visit, go to IRS.gov/TACLocator to find
the nearest TAC, check hours, available services, and appointment options. Or, on the
IRS2Go app, under the Stay Connected tab,
choose the Contact Us option and click on “Local Offices.”
Watching IRS videos. The IRS Video portal
(IRSvideos.gov) contains video and audio presentations for individuals, small businesses,
and tax professionals.
Getting tax information in other languages.
For taxpayers whose native language isn’t English, we have the following resources available.
Taxpayers can find information on IRS.gov in
the following languages.
Spanish (IRS.gov/Spanish).
Chinese (IRS.gov/Chinese).
Vietnamese (IRS.gov/Vietnamese).
Korean (IRS.gov/Korean).
Russian (IRS.gov/Russian).
The IRS TACs provide over-the-phone interpreter service in over 170 languages, and the
service is available free to taxpayers.
The Taxpayer Advocate
Service Is Here To Help You
What is the Taxpayer Advocate
Service?
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that
helps taxpayers and protects taxpayer rights.
Our job is to ensure that every taxpayer is treated fairly and that you know and understand
your rights under the Taxpayer Bill of Rights.
What Can the Taxpayer Advocate
Service Do For You?
We can help you resolve problems that you
can’t resolve with the IRS. And our service is
free. If you qualify for our assistance, you will be
assigned to one advocate who will work with
you throughout the process and will do everything possible to resolve your issue. TAS can
help you if:
Your problem is causing financial difficulty
for you, your family, or your business,
You face (or your business is facing) an
immediate threat of adverse action, or
You’ve tried repeatedly to contact the IRS
but no one has responded, or the IRS
hasn’t responded by the date promised.
How Can You Reach Us?
We have offices in every state, the District of
Columbia, and Puerto Rico. Your local advocate’s number is in your local directory and at
TaxpayerAdvocate.IRS.gov/Contact-Us.
You
can also call us at 1-877-777-4778.
How Can You Learn About Your
Taxpayer Rights?
The Taxpayer Bill of Rights describes 10 basic
rights that all taxpayers have when dealing with
the
IRS.
Our
Tax
Toolkit
at
TaxpayerAdvocate.IRS.gov can help you understand what these rights mean to you and
how they apply. These are your rights. Know
them. Use them.
How Else Does the Taxpayer
Advocate Service Help Taxpayers?
TAS works to resolve large-scale problems that
affect many taxpayers. If you know of one of
these broad issues, please report it to us at
IRS.gov/SAMS.
Low Income Taxpayer
Clinics
Low Income Taxpayer Clinics (LITCs) are independent from the IRS. LITCs represent individuals whose income is below a certain level and
need to resolve tax problems with the IRS, such
as audits, appeals, and tax collection disputes.
In addition, clinics can provide information
about taxpayer rights and responsibilities in different languages for individuals who speak
English as a second language. Services are offered for free or a small fee. To find a clinic near
you, visit TaxpayerAdvocate.IRS.gov/LITCmap
or see IRS Publication 4134, Low Income
Taxpayer Clinic List.
Page 29
Index
To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
Cantors 10
Christian Science:
Practitioners 2, 4–6
Readers 2, 4, 5
Common-law employee 3
Commonwealth of the Northern
Mariana Islands (CNMI) 4, 8
Comprehensive example 13
Credit:
Earned income 12
Retirement savings
contributions 12
Election to exclude church
employees 4
Filing requirements for most
taxpayers 11
Foreign earned income 10
Form:
1040 9–11, 14, 16, 17
1040-ES 11
1040X 6, 7
2106-EZ 22
4029 5, 7, 11
4361 5, 6, 11
8959 2, 8
941 7
943 7
944 7
Schedule A (Form 1040) 18
Schedule C-EZ (Form 1040) 19
Schedule EIC (Form 1040A or
1040) 21
Schedule SE (Form 1040) 20
SS-8 4
D
G
A
Accountable plan 8
Additional Medicare Tax 2, 8
Administrators 9
American Samoa 4, 8
Assistance (See Tax help)
C
Deduction for self-employment
tax 10
E
Earned income credit 12
Effective date:
Exemption from FICA taxes 7
Exemption from self-employment
(SE) tax 6, 7
Employment status 3
Estimated tax 11
Exclusion, foreign earned
income 10
Exemption:
Form 4029 5, 7
Form 4361 5, 6
From FICA taxes 7
From self-employment (SE)
tax 5–7
F
Federal Insurance Contributions
Act (See FICA)
FICA:
Earnings covered 2
Effective date of exemption 7
Page 30
Gross income:
Amounts included in 7
Amounts not included in 8
Guam 4, 8
H
Health insurance costs,
deductibility 10
Home ownership, exclusion of
allowance 9, 10
House or parsonage, fair rental
value 9
I
Identity theft 28
Income tax:
Estimated tax 11
Income and expenses 9–11
Withholding 11
Individual retirement
arrangements (IRAs) 12
Religious orders, members of 2,
4–6, 10
Religious workers 2, 4
Lay employees (See Religious
Rental allowance 7, 9, 10
workers)
Resident aliens 4
Living abroad 7, 10
Retired ministers 9
Retirement savings
arrangements 12
M
Retirement
savings contributions
Members of recognized religious
credit 12
sects 2, 6
Royalty income from books 5
Members of religious orders 2,
4–6, 10
Minimum essential coverage 12
S
Ministerial services, exemption
SECA 2, 3
for:
Sects, members of recognized
Christian Science practitioners
religious 2, 6
and readers 5
Self-employment, net earnings
Members of religious orders 5
from 7–9
Ministers 4
Self-Employment Contributions
Ministers 2–4, 6, 9–11
Act (See SECA)
Health insurance costs of 10
Self-employment tax:
Retired 9
Deduction 10
Missionary team, married
Exemption 5–7, 11
couple 8
Maximum earnings 8
Nonfarm optional method 8
Refunds of 6, 7
N
Regular method 7
Nonaccountable plan 8
Shared responsibility
Nonfarm optional method 8
payment 12
Nonresident aliens 4
SIMPLE plan 12
Simplified employee pension
(SEP) plan 12
O
Social security coverage 3
Offerings and fees 7, 9
L
Overseas duty 7, 10
P
Parsonage allowance 7, 9, 10
Premium tax credit 12
Publications (See Tax help)
Puerto Rico 4, 8
K
Tax-free income, deductibility of
expenses 10
Tax help 28
Tax-sheltered annuity plans 12
Teachers 9
Theological students 9
Traveling evangelists 10
Q
Qualified retirement plan 12
R
Keogh (H.R.10) plans 12
T
Refunds, self-employment tax 6,
7
Reimbursements 8
U
U.S. citizens 4
U.S. Virgin Islands 4, 8
V
Vow of poverty 2, 4, 5, 10
Publication 517 (2017)
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