IRS Publication 517

What Is IRS Publication 517?

IRS Publication 517: Social Security and Other Information for Members of the Clergy and Religious Workers is a document distributed every year by the Internal Revenue Service enumerating the manners in which that the people who work in or perform services for strict organizations and orders are required to file their income, Social Security and Medicare taxes. As strict employees, these taxpayers are furnished with certain tax benefits and modifications of the standard tax rules.

Understanding IRS Publication 517

IRS Publication 517: Social Security and Other Information for Members of the Clergy and Religious Workers depicts and refreshes the income tax and Social Security/Medicare tax rules for the people who serve in an ecclesiastical capacity, are individuals from recognized strict orders or factions, or are some other kind of strict organization employee. The regulations with respect to Social Security and Medicare taxes specifically can be complex.

These two taxes are collected through either the Self-Employment Contributions Act (SECA) system or the Federal Insurance Contributions Act (FICA) system. IRS Publication 517 assists with figuring out which forms of income are subject to SECA, and which are subject to FICA rules.

Starting around 2017, under SECA, the self-employed individual qualifying for this category is responsible for paying their own taxes as a whole. Under FICA, the employer and the employee are each responsible for half of the taxes due to Social Security and Medicare. All pastorate or strict workers will be subject to one of these systems, yet all at once not both.

Likewise, starting around 2020, wages and self-employment income for church and strict workers are likewise subject to a 0.09% Additional Medicare Tax in the event that it surpasses a certain amount. Form 8959 is utilized to figure the supplemental tax owed.

Who Is Affected by IRS Publication 517?

IRS Publication 517 applies to several pastoral categories. This is the way the FICA/SECA rules break down for those performing pastoral or strict services.

Strict services, as a general rule, are the services performed in the exercise of a service, in duties required by a strict order, or in the exercise of an individual's job as a professional Christian Science practitioner or reader.

• Ministers are ordinarily covered under SECA, inasmuch as they don't have an approved IRS exemption. These ecclesiastical earnings are exempt under FICA.
• Individuals from a strict order who have not taken a commitment of poverty are commonly covered under SECA, insofar as they don't have an approved IRS exemption. These ecclesiastical earnings are exempt under FICA.
• Individuals from a strict order who have taken a commitment of poverty are commonly covered under FICA in the event that the order has chosen for FICA coverage, and the individual worked outside of the order however was not required to do as such. These clerical earnings are exempt under SECA.
• Strict workers or church employees can be covered under one or the other FICA or SECA, contingent upon which category the employer chooses to follow.
• Individuals from a recognized strict sect can be covered under FICA on the off chance that they are an employee without an approved exemption from the IRS, or under SECA in the event that they are self-employed and don't have an approved exemption from the IRS.
• Christian Scientist practitioners or readers are regularly covered under SECA in the event that they don't have an approved exemption from the IRS. These pastoral earnings are exempt under FICA.

Along with showing which and whose earnings are taxed under which system, Publication 517 likewise depicts how individuals from the church or strict factions figure net self-employment earnings, and how to apply for exemptions from self-employment and FICA taxes.

Download IRS Publication 517 Here

Like most IRS publications and forms, Publication 517 can be downloaded in PDF form from the IRS' official website.

Similarly as with numerous IRS regulations, different limitations of Publication 517 change from one year to another, so it is basic that every one of those impacted by this section of the tax code generally allude to the most recent rendition. The website likewise outfits the most recent information and advancements connecting with the regs at IRS.gov/Pub517.

Features

• Publication 517 likewise shows how to work out taxable earnings, and how to apply for tax exemptions.
• Publication 517 subtleties the manners in which that the people who work in or perform services for strict organizations and orders are required to file their income, Social Security, and Medicare taxes.
• Concerning Social Security and Medicare, Publication 517 demonstrates which forms of income are payable under the Self-Employment Contributions Act (SECA) system or the Federal Insurance Contributions Act (FICA) system.
• IRS Publication 517 gives tax information to the people who are individuals from the church or other strict workers.