Community Discussion

Does anyone know the general reporting limits and regulations on income for missionaries living oversees? If a missionary lives out of the country and had $15,000 in donations with no taxes taken out during the year, do they even have to file a return? What is the income threshold for filing?

Trey, hopefully some accountants will visit the site and weigh in on this, but I do happen to know that Steve Richardson and Co specialize in doing taxes for ministers and missionaries. I would highly recommend them. I do know typically that if you're an ordained minister, you want to receive at least part of your income as a non-taxable "housing allowance." $1,000 per month is very reasonable, so you might not owe very much.

If you are single, the minimum filing requirement is $8,450 and for married filing joint it is $16,900. However, even if you are married, I would still recommend filing your taxes (with the assistance of a CPA that knows how to treat missionary income). Missionaries ofen have their donations passed through to them without any IRS involvement (ie. W2 or 1099) and as such, the IRS would view the mission work as self-employment income. The good news is, that you can write off most of your travel and living expenses, and will rarely owe very much in taxes. My advice would be to get a good CPA, like the one Joshua recommended.

It is easiest to file as self-employed if you don't recieve a W2. Quite frankly you should file whether you have to pay or not simply so that you have the record of it if there are ever any questions in the future. Even if you don't owe taxes (and those who are living overseas are exempt from paying until at least $32,000 as far as I know), you probably still owe SS. If you are ordained claim your housing and in any case claim as many ministry expenses as you can as that will decrease your SS payments. Quite honestly, my guess is that if you are only receiving $15,000/year you probably don't want the expense of a CPA. I have never had any problems with my income tax froms that I have filed myself.

Well acually this is another question. My funds are donated to an agency and I draw funds as needed. If I don't draw funds for a month but send my crew fees directly to the agency from my bank account am I still required to pay the 15.3% self employment tax on those funds. It doesn't make sense that I would be required to pay taxes again on monies that I have already paid tax on... but I haven't been able to find any information that states otherwise. Help!

Our church is wanting to sponsor a pastor in Peru (non US citizen). What are the rules regarding taxes for our church and the pastor? We have found an organization with a 5013-C to send our money through. Do either of us need to pay taxes sending the money through this organization? thanks for your help

Regarding the comment made by Esther on 5/31/07, what is the $32K exemption she is talking about? Where can I find info on this?

My husband and I want to open our home for missionaries to reside when they need a place to stay. How do we record that on our taxes?