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taxmap/pubs/p517-009.htm#en_us_publink100033704

Worksheets(p24)


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These worksheets are provided to help you figure your taxable ministerial income, your allowable deductions, and your net self-employment income.
taxmap/pubs/p517-009.htm#w01

Worksheet 1. Figuring the Percentage of Tax-Free Income

Note. For each line, enter the appropriate amount in all boxes that are not shaded.

 
Source of Income
(a)
Taxable
(b)
Tax-free
(c)
Total
1 W-2 salary as a minister (from box 1 of Form W-2)1     
2 Gross income from weddings, baptisms, writing, lecturing, etc. (from line 1 of Schedule C or C-EZ)2     
Note. Complete either lines 3a–3e or lines 4a–4i.    
• If your church provides you with a parsonage, complete lines 3a–3e.    
• If, instead of providing a parsonage, your church provides you with a rental or parsonage allowance, complete lines 4a–4i.
    
3a
FRV* of parsonage provided by church3a    
b
Utility allowance, if any3b    
c
Actual expenses for utilities3c    
dEnter the smaller of line 3b or 3c3d    
e
Excess utility allowance (subtract line 3d from line 3b)3e    
4a
Parsonage or rental allowance4a    
bUtility allowance, if separate4b    
cTotal allowance (add lines 4a and 4b)4c    
d
Actual expenses for parsonage4d    
eActual expenses for utilities4e    
fTotal actual expenses for parsonage and utilities (add lines 4d and 4e)4f    
g FRV* of home, plus the cost of utilities4g    
h
Enter the smaller of line 4c, 4f, or 4g4h    
i
Excess allowance (Subtract line 4h from line 4c)4i     
5 
Ministerial income (for columns (a), (b), and (c), add lines 1 through 4i)5     

6 

Percentage of tax-free income: Total tax-free income $   
Total income  $ 
= %** 
* FRV (Fair Rental Value): As determined objectively and between unrelated parties, what it would cost to rent a comparable home (including furnishings) in a similar location.
** This percentage of your ministerial expenses will not be deductible. Use Worksheets 2 and 3 to figure your allowable deductions.
taxmap/pubs/p517-009.htm#w0203

Worksheet 2. Figuring the Allowable Deduction for Schedule C or C-EZ Expenses

1 
Percentage of expenses that are nondeductible (from Worksheet 1, line 6):       %
2 
Business use of car:        miles × 55¢ (.55)2   
3 
Meals and entertainment: $      × 50% (.50)3   
4 
Other expenses (list item and amount)    
a
 4a  
b
 4b  
c
 4c  
d
 4d  
e
 4e  
f
Total other expenses (add lines 4a through 4e)4f   
5 
Total Schedule C or C-EZ expenses (add lines 2, 3, and 4f)5   
6 
Nondeductible part of Schedule C or C-EZ expenses (multiply line 5 by the percent in line 1)6   
7 
Deduction allowed.* Subtract line 6 from line 5. Enter the result here and on Schedule C, line 27, or Schedule C-EZ, line 2.7   
* None of the other deductions claimed in this return are allocable to tax-free income.
 
 

Worksheet 3. Figuring the Allowable Deduction for Form 2106 or 2106-EZ Expenses

  Column A Column B
1  Percentage of expenses that are nondeductible (from Worksheet 1, line 6):       %
2 Use of car for church business:   miles × 55¢ (.55)2   
3 Meals and entertainment3   
4 Other expenses (list item and amount)    
a 4a  
b 4b  
c 4c  
d 4d  
e 4e  
5 Total expenses. In column A, add lines 2 and 4a through 4e and enter the result. In
column B, enter the amount from line 3.
5       
6 Enter reimbursements received for other expenses (Column A) and meals and entertainment (Column B) that were not included in box 1 of Form W-26       
7 Total Form 2106 or 2106-EZ unreimbursed expenses (subtract line 6 from line 5)7   
8 In Column A, enter the amount from line 7. In Column B, multiply line 7 by 50% (.50)8       
9 Add the amounts on line 8 of both columns and enter the total here9       
10 Nondeductible part of Form 2106 or 2106-EZ expenses (multiply line 9 by the percent in
line 1)
10   
11  Ministerial employee business expense deduction allowed.* Subtract line 10 from line 9. Enter the result here and on Form 2106, line 10, or Form 2106-EZ, line 6.11   
* None of the other deductions claimed in this return are allocable to tax-free income.
taxmap/pubs/p517-009.htm#w04

Worksheet 4. Figuring Net Self-Employment Income for Schedule SE (Form 1040)

1 
W-2 salary as a minister (from box 1 of Form W-2)1  
2 
Net profit from Schedule C, line 31, or Schedule C-EZ, line 32   
3a
Parsonage allowance (from Worksheet 1, line 3a or 4a)3a  
b
Utility allowance (from Worksheet 1, line 3b or 4b)3b  
c
Total allowance (add lines 3a and 3b)3c 
4 
Add lines 1, 2, and 3c4   
5 
Schedule C or C-EZ expenses allocable to tax-free income (from Worksheet 2, line 6)5   
6 
Unreimbursed ministerial employee business expenses (from Worksheet 3,
line 9)
6   
7 
Total business expenses not deducted in lines 1 and 2 above (add lines 5
and 6)
7  
8 
Net self-employment income. Subtract line 7 from line 4. Enter here and on Schedule SE, Section A, line 2, or Section B, line 2.8