2018 Publication 517 - irs.gov

1 Publication 517. Cat. No. 15021X Contents Social security Future Developments .. 1. Department of the What's New .. 1. and Other Treasury Internal Reminders .. 2. Revenue Information for Service Introduction .. 2. Social security Coverage .. 3. Members of the Ministerial Services .. 4. Clergy and Exemption From Self-Employment (SE) Tax .. 5. Religious Self-Employment Tax: Figuring Net Earnings .. 7. Workers Income Tax: Income and Expenses .. 9. Filing Your Return .. 11. Retirement Savings Arrangements .. 11. For use in preparing Health Care: Individual Responsibility .. 12. 2018 Returns Earned Income Credit (EIC) .. 12. Worksheets .. 14. How To Get Tax Help .. 15. Index .. 18. Future Developments For the latest information about developments related to Pub.

2 517, such as legislation enacted after this Publication was published, go to What's New No miscellaneous itemized deductions al- lowed. You can no longer claim any miscella- neous itemized deductions. Miscellaneous itemized deductions are those deductions that would have been subject to the 2% of adjusted gross income limitation. See the Instructions for Schedule A (Form 1040) for more information on these changes. 2018 Form 1040 redesigned. The 2018 Form 1040 has been redesigned and is supplemen- ted with new Schedules 1 through 6. These ad- ditional schedules will be used as needed to complete more complex tax returns. Referen- ces to Form 1040 and its related schedules have been revised accordingly in this publica- tion.

3 Form 1040A and Form 1040-EZ no longer available. Form 1040A and Form 1040-EZ. aren't available to file your 2018 taxes. Previous Get forms and other information faster and easier at: filers of these forms will file Form 1040. Refer- (English) ( ) ences to these forms have been revised ac- (Espa ol) (Pусский) cordingly in this Publication . ( ) (Ti ngVi t) Standard mileage rate. The business stand- ard mileage rate for 2018 is cents a mile. Jan 17, 2019. Earnings subject to social security tax. For the extent they exceed the applicable threshold There is no employer match for Additional Med- 2018, the maximum wages and self-employ- for an individual's filing status. Medicare wages icare Tax. For more information, see Form ment income subject to social security tax has and self-employment income are combined to 8959, Additional Medicare Tax, and its separate increased to $128,400.

4 Determine if income exceeds the threshold. A instructions. Modified adjusted gross income (AGI) limit self-employment loss isn't considered for pur- This Publication contains information for the for traditional IRA contributions. For 2018, poses of this tax. Railroad retirement (RRTA) following classes of taxpayers. you may be able to take an IRA deduction for compensation is separately compared to the Ministers. your contributions if you were covered by a re- threshold. Additional Medicare Tax applies to Members of a religious order. tirement plan at work and your modified AGI is: Medicare wages, RRTA compensation, and Christian Science practitioners and read- Less than $121,000 if married filing jointly self-employment income that are more than: ers.

5 Or qualifying widow(er); $125,000 if married filing separately, Religious workers (church employees). Less than $73,000 if single or head of $250,000 if married filing jointly, or Members of a recognized religious sect. household; or $200,000 for any other filing status. Less than $10,000 if married filing sepa- rately. If you file a joint return and either you or your Table 1. Are Your Ministerial Earnings* Covered Under FICA or SECA? spouse wasn't covered by a retirement plan at Find the class to which you belong in the left column and read work, you may be able to take an IRA deduction across the table to find if you are covered under FICA or SECA. if your modified AGI is less than $199,000.

6 Don't rely on this table alone. Also read the discussion for the class Modified AGI limit for Roth IRA contribu- in the following pages. tions increased. For 2018, you may be able to contribute to your Roth IRA if your modified AGI Class Covered under FICA? Covered under SECA? is: Less than $199,000 if married filing jointly Minister NO. Your ministerial earnings YES, if you don't have an or qualifying widow(er); are exempt. approved exemption from Less than $135,000 if single, head of the IRS. household, or married filing separately and you didn't live with your spouse at any time NO, if you have an during the year; or approved exemption. Less than $10,000 if married filing sepa- rately and you lived with your spouse at Member of a religious order NO.

7 Your ministerial earnings YES, if you don't have an any time during the year. who hasn't taken a vow of are exempt. approved exemption from poverty the IRS. Earned income credit (EIC). For 2018, the maximum amount of income you can earn and NO, if you have an still claim the EIC has increased. See Earned approved exemption. Income Credit, later. Member of a religious order YES, if: NO. Your ministerial who has taken a vow of Your order elected FICA earnings are exempt. poverty coverage for its Reminders members; or Social security information. Social security You worked outside the order and the work beneficiaries may quickly and easily obtain vari- ous information from SSA's website with a my wasn't required by, or Social security account, including getting a re- done on behalf of, the placement Form SSA-1099 or SSA-1042S.

8 For order. more information, go to NO, if neither of the above Photographs of missing children. The IRS is a proud partner with the National Center for applies. Missing & Exploited Children (NCMEC). Pho- Christian Science practitioner NO. Your ministerial earnings YES, if you don't have an tographs of missing children selected by the or reader are exempt. approved exemption from Center may appear in this Publication on pages the IRS. that would otherwise be blank. You can help bring these children home by looking at the NO, if you have an photographs and calling 1-800-THE-LOST approved exemption. (1-800-843-5678) if you recognize a child. Religious worker (church YES, if your employer didn't YES, if your employer employee) elect to exclude you.

9 Elected to exclude you from Introduction FICA. Three federal taxes are paid on wages and self-employment income income tax, social NO, if your employer elected NO, if you are covered security tax, and Medicare tax. Social security to exclude you. under FICA. and Medicare taxes are collected under one of Member of a recognized YES, if you are an employee YES, if you are two systems. Under the Self-Employment Con- religious sect and don't have an approved self-employed and don't tributions Act (SECA), the self-employed per- exemption from the IRS. have an approved son pays all the taxes. Under the Federal Insur- exemption from the IRS. ance Contributions Act (FICA), the employee and the employer each pay half of the social se- NO, if you have an approved NO, if you have an curity and Medicare taxes.

10 No earnings are subject to both systems. exemption. approved exemption. In addition, all wages and self-employment income that are subject to Medicare tax are * Ministerial earnings are the self-employment earnings that result from ministerial services, defined and discussed subject to a Additional Medicare Tax to later. Page 2 Publication 517 (2018). Note. Unless otherwise noted, in this publi- 535 Business Expenses 535 earnings for these ministerial services (defined cation references to members of the clergy in- later) are subject to self-employment (SE) tax 590-A Contributions to Individual clude ministers, members of a religious order unless one of the following applies. 590-A. Retirement Arrangements (IRAs).