Publication 517 - Social Security And Other Information For Members Of The Clergy And Religious Workers - 2002 Page 21

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Attachment 1. Computation of expenses, allocable to tax-free ministerial income, that are nondeductible
Taxable
Tax-Free
Total
Salary as a minister
$
31,000
$
31,000
Parsonage allowance – Mortgage ($800 x 12)
$
9,600
9,600
Utilities ($100 x 12)
$
1,200
−960
Minus actual costs
960
960
Excess utilities
$
240
240
240
Gross income from weddings, baptisms, and honoraria
4,000
4,000
Ministerial income
$
35,240
$
10,560
$
45,800
Percentage of nondeductible expenses: $10,560 ÷ $45,800 = 23%
Schedule C – EZ Deduction Computation
Marriage and family booklets
$
87
Business use of car:
174
(477 miles x 36.5¢)
Unadjusted Schedule C – EZ expense
$
261
Minus:
−60
Nondeductible part of Schedule C – EZ expenses (23% x $261)
Schedule C – EZ deductions (line 2)
$
201
Form 2106 – EZ — Employee Business Expense Deduction Computation
Car expenses for church business:
$
(2,708 miles x 36.5¢)
988
Publications and booklets
219
Unadjusted Form 2106 – EZ expenses (line 1 plus line 4)
$
1,207
Minus:
−278
Nondeductible part of Form 2106 – EZ expenses (23% x 1,207)
Employee business expense deduction — Form 2106 – EZ line 6
$
929
None of the other deductions claimed in the return are allocable to tax-free income.
Attachment 2. Attachment to Schedule SE (Form 1040)
Church wages
$
31,000
Personage allowance – Mortgage
$
9,600
Utilities
1,200
10,800
Net profit from Schedule C – EZ
3,799
$
45,599
Less:
Schedule C – EZ expenses allocable to tax-free income
$
60
Ministerial employee business expenses
(unadjusted Form 2106 – EZ expenses (line 1 plus line 4)
1,207
1,267
Net Self-Employment Income
Schedule SE, Section A, line 2
$
44,332
Page 21

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