Foreign Missionary Expenses

Question:

What expenses can be deducted by a Form 1099-MISC foreign missionary in reducing his self-employment income. I would tend to take normal business type expenses. What about living expenses such as rent, utilities and possibly food?

Answer:

The missionary must attach Schedule C to his Form 1040 return and deduct the standard business expenses classified there. If any of his supporting churches designated a portion of his support as housing allowance, then his rent and utilities (but not food) can be used to justify the non-taxable status of his housing allowance. Any excess housing allowance must be reported as taxable income. Of course, unlike Schedule C business expenses, a properly documented housing allowance does not reduce the missionary's self-employment bill (calculated on Schedule SE to Form 1040).

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MinistryCPA - Corey A. Pfaffe, CPA, LLC

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