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Reporting of Income by Foreign Missionaries

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Question:

 Some of the churches supporting a foreign missionary have issued him Form 1099-MISC reporting non-employee compensation. Does he need to fill out a Form 1040, Schedule C (or C-EZ)?

 Answer:

 Yes, he must file Schedule C. Most churches send their support to a missionary's mission agency. The agency then typically issues to him a Form W-2 for employee earnings. Churches bypassing the agency and making direct contributions to the missionary are treating him as an independent businessman (in the eyes of the Internal Revenue Service) rather than as an employee of the agency. For a number of reasons that I've spelled out in earlier blog postings (type "mission" in the search window of this blog) I believe that best practice is to use the agency as a conduit for the contributions.
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  1. WendyJanuary 20, 2014 at 12:38 PM

    Our church is sending a 1099 to a medical mission. A young lady from our church went to this country, married a native of the country and they now run two medical missions with staff, rent, etc. as expenses. Can these be include as well on the Schedule C that they will file?

    ReplyDelete
  2. Corey PfaffeJanuary 25, 2014 at 9:56 AM

    Wendy,

    Yes, independent contractors may deduct their business expenses on Schedule C, according to IRS Publication 535.

    ReplyDelete

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