us internal revenue service: p517--2005

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Publication 517 Contents Cat. No. 1502 1X What’s New ..................... 1 Department of the Reminder ...................... 1 Social Security Treasury Introduction ..................... 1 Internal Revenue and Other Social Security Coverage ........... 3 Service Exemption From Information for Self-Employment (SE) Tax ........ 4 Qualified Services ................ 6 Members of the Figuring Net Earnings From Self-Employment for SE Tax ...... 6 Clergy and Income Tax: Income and Expenses ................... 8 Religious Filing Your Return ................ 10 Retirement Savings Workers Arrangements ................ 10 Earned Income Credit .............. 11 For use in preparing Comprehensive Example ........... 11 Worksheets ..................... 23 2005 Returns How To Get Tax Help .............. 26 Index .......................... 27 What’s New Increased contribution limits for traditional and Roth IRAs. The contribution limit to your traditional or Roth IRA for 2005 is $4,000 ($4,500 for people age 50 or older by the end of the year). Reminder Photographs of missing children. The Inter- nal Revenue Service is a proud partner with the National Center for Missing and Exploited Chil- dren. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Introduction Social security and Medicare taxes are collected under two systems. Under the Self-Employment Contributions Act (SECA), the self-employed person pays all the taxes. Under the Federal Get forms and other information Insurance Contributions Act (FICA), the em- ployee and the employer each pay half of the faster and easier by: taxes. No earnings are subject to both systems. Internet www.irs.gov This publication covers the following topics about the collection of social security and Medi-

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