Special Rules For Certain Employees Flashcards
What must clergy members report as income?
Clergy members must report income from salaries, fees (e.g., for weddings or funerals), and other earnings.
Are payments made directly to a religious institution taxable?
Payments made directly to a religious institution are not taxable.
What is the tax treatment of earnings turned over to a religious organization?
Earnings turned over to the organization may qualify for a charitable deduction.
How are pensions treated for clergy members?
Pensions are treated like regular pensions.
What can clergy members exclude from taxable income?
Clergy members can exclude the rental value of a home or a housing allowance (including utilities) from taxable income.
When must clergy members include housing amounts as self-employment income?
The amount must be included as self-employment income if self-employment tax applies.
What is the self-employment tax requirement for clergy earning $108.28 or more?
Clergy earning $108.28 or more as church employees must pay self-employment tax.
How is the tax treatment of earnings for members of religious orders determined?
The tax treatment depends on whether the services were performed for the order or outside the order.
What is the tax status of income turned over to a religious order for required duties?
If members perform required duties for the order, income turned over is not taxable.
What is the tax status of income for members working outside the order?
Income is taxable unless the work is similar to the order’s typical duties and part of the member’s required duties as an agent of the order.
What is the tax treatment for income earned by U.S. citizens working with foreign employers?
Income earned by U.S. citizens or residents for working with international organizations or foreign governments is not subject to Social Security or Medicare taxes.
How should U.S. citizens report income from international organizations?
U.S. citizens report this income as self-employment income if services were performed in the U.S. and pay self-employment tax.
What is the tax status of income from foreign governments?
Income is exempt from Social Security and Medicare taxes, regardless of the employee’s citizenship or work location.
How must military members report their wages?
Military members must report wages as taxable income.
Is military retirement pay taxable?
Yes, retirement pay is taxable as a pension.
