Deduct Expenses Related To Church Mission Trips On Your Taxes
NOTE: The Clergy Tax Law Blog now resides on Clergy Financial Resources’ website. Please click on the follow link to visit the Clergy Tax Law Blog at its new home:
Summer is popular time for many churches to spread their ministry beyond the walls of their church. Whether your mission trip is an hour away or halfway across the globe, there is a substantial tax benefit available to people donating towards a mission trip. Many people that go on mission trip do not receive the full amount of tax benefits they are entitled to.
Since the church is a qualified charitable organization, you are able to deduct any cash donations to the church for the mission trip, as long as the church is in control of the funds donated. Gifts for a specific person(or made to the church and flagged for a specific person) to attend the mission trip are considered a gift and are not tax deductible. In order for the donation to stay tax deductible, you should make the donation directly to the church/mission group and not mark the funds for any individual.
Although you cannot deduct the value of your services during a mission trip, you may be able to deduct some amounts you pay in giving services during a mission trip. The amounts must be:
• Directly connected with the mission trip,
• Expenses you had only because of the services you gave,
Travel. Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses.
The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses.
Deductible travel expenses include:
• Air, rail, and bus transportation,
• Out-of-pocket expenses for your car,
• Taxi fares or other costs of transportation between the airport or station and your hotel,
• Lodging costs, and
• The cost of meals.
These expenses are only deductible on days where you are mostly charitable work and there no personal pleasure involved(besides the pleasure of spreading your ministry). Travel day are considered “work” days when it comes to the deductibility of expenses. Side trips or other sightseeing activities are not considered charitable expenses.
Source: IRS Pub 526
Clergy Financial Resources
Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.