Publication 517 - Social Security And Other Information For Members Of The Clergy And Religious Workers - 2011 Page 11
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30earnings on them are not taxed until they are
on your Form W-2, but you will pay tax on distri-
b. Took a full-time, on-farm training course
distributed.
butions from your plan. However, if you choose
given by a school or a state, county, or
local government agency.
to have contributions made to a Roth contribu-
Retirement plans for the self-employed. To
tion program, they will not be excluded from your
set up one of the following plans you must be
3. Someone, such as your parent(s), claims
income, but will be distributed tax free.
self-employed.
an exemption for you on his or her 2011
An exception to the above applies if you are
•
tax return.
Qualified retirement plan (also called a Ke-
a minister or chaplain and, in the exercise of
ogh or H.R. 10 plan).
your ministry, you are either self-employed or
4. Your adjusted gross income for 2011 is
•
employed by an organization that is not exempt
more than:
SEP (simplified employee pension) plan.
from tax under section 501(c)(3) of the Internal
•
SIMPLE (savings incentive match plan for
a. $56,500, if your filing status is married
Revenue Code. If the exception applies to you,
employees) plan.
filing jointly,
you can deduct your contributions to a 403(b)
plan as explained next.
b. $42,375, if your filing status is head of
The common-law rules determine whether
household, or
•
you are an employee or a self-employed person
If you are self-employed, deduct your con-
for purposes of setting up a retirement plan. See
tributions on Form 1040, line 28.
c. $28,250, if your filing status is single,
Employment status for other tax
purposes, ear-
married filing separately, or qualifying
•
If you are not self-employed and your em-
lier, under Social Security Coverage of Mem-
widow(er) with dependent child.
ployer does not exclude your contributions
bers of the Clergy. This is true even if your
from your earned income, deduct your
compensation for
ministerial services
(defined
contributions on Form 1040, line 36. Enter
Full-time student. You are a full-time stu-
earlier) is subject to SE tax.
the amount of your deduction and “403(b)”
dent if you are enrolled for the number of hours
For example, if a congregation pays you a
on the dotted line next to line 36.
or courses the school considers to be full time.
salary for performing ministerial services and
you are subject to the congregation’s control,
Adjusted gross income. When figuring ad-
Retirement savings contributions credit.
you generally are a common-law employee. You
justed gross income, you must add back any
are not a self-employed person for purposes of
You may be able to take a tax credit of up to
exclusion or deduction claimed for the year for:
setting up a retirement plan. This is true even if
$1,000 (up to $2,000 if filing jointly) for certain
1. Foreign earned income,
your salary is subject to SE tax.
contributions you make to any of the retirement
On the other hand, amounts received directly
plans or IRAs discussed earlier. The credit is
2. Foreign housing costs,
from members of the congregation, such as fees
based on the contributions you make and your
3. Income of bona fide residents of American
for performing marriages, baptisms, or other
credit rate. The credit rate can be as low as 10%
Samoa, and
personal services that are reported on Schedule
or as high as 50%, depending on your adjusted
C or C-EZ (Form 1040), are earnings from
gross income. Figure the credit on Form 8880,
4. Income of bona fide residents of Puerto
self-employment for all tax purposes.
Credit for Qualified Retirement Savings Contri-
Rico.
For more information on establishing a SEP,
butions.
SIMPLE, or qualified retirement plan, see Publi-
More information. For more information
You cannot take the credit if any of the fol-
cation 560, Retirement Plans for Small Busi-
about the credit, see Publication 590.
lowing apply.
ness.
1. You were born after January 1, 1994.
Individual retirement arrangements (IRAs).
The traditional IRA and the Roth IRA are two
2. You were a student who during any part of
Earned Income Credit
individual retirement arrangements you can use
5 calendar months (not necessarily con-
to save money for your retirement. Generally,
secutive) of 2011:
The earned income credit is a credit for certain
your maximum contribution for 2011 to either of
a. Was enrolled as a full-time student at a
people who work. If you qualify for it, the earned
these plans (or to a combination of the two) is
school, or
income credit reduces the tax you owe. Even if
the smaller of your taxable compensation or
$5,000 ($6,000 if you are age 50 or older).
However, your contributions to a Roth IRA
Table 4. 2011 Filing Requirements for Most Taxpayers
may be further limited if your adjusted gross
income is above a certain amount. Roth IRA
contributions are not deductible, but if you sat-
AND at the end of 2011
THEN file a return if your
isfy certain requirements, all earnings in the
IF your filing status is ...
you were ...*
gross income was at least ...**
Roth IRA are tax free and neither your nonde-
under age 65
$ 9,500
ductible contributions nor any earnings on them
single
65 or older
10,950
are taxable when withdrawn.
If you contribute to a traditional IRA, your
under 65 (both spouses)
$19,000
deduction may be reduced or eliminated if you or
married filing jointly***
65 or older (one spouse)
20,150
your spouse is covered by an employer retire-
65 or older (both spouses)
21,300
ment plan (including, but not limited to, a SEP,
SIMPLE, or qualified retirement plan).
married filing separately
any age
$ 3,700
For more information on IRAs, see Publica-
under 65
$12,200
tion 590.
head of household
65 or older
13,650
Tax-sheltered annuity plans. Church em-
qualifying widow(er) with
under 65
$15,300
ployees, members of religious orders, and duly
dependent child
65 or older
16,450
ordained, commissioned, or licensed ministers
working as ministers or chaplains can partici-
* If you were born on January 1, 1947, you are considered to be age 65 at the end of 2011.
pate in tax-sheltered annuity (403(b)) plans. For
** Gross income means all income you received in the form of money, goods, property, and services
more information, see Publication 571,
that is not exempt from tax, including any income from sources outside the United States or from the
Tax-Sheltered Annuity Plans (403(b) Plans) For
sale of your main home (even if you can exclude part or all of it). Do not include any social security
Employees of Public Schools and Certain
benefits unless (a) you are married filing a separate return and you lived with your spouse at any time
Tax-Exempt Organizations.
in 2011, 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
Deducting contributions to tax-sheltered
instructions for Form 1040, lines 20a and 20b, to figure the taxable part of social security benefits you
annuity plans. If you are an employee, your
must include in gross income.
employer may exclude allowable contributions
*** If you did not live with your spouse at the end of 2011 (or on the date your spouse died) and your
to a 403(b) plan from your income. These contri-
gross income was at least $3,700, you must file a return regardless of your age.
butions will not be included in your total wages
Publication 517 (2011)
Page 11
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