January 30, 2010

Missions Trip Giving

Question:

When someone gives to a general fund for a missions trip it is tax deductible giving. If someone gives to a specific person for a missions trip, is it tax deductible giving? Can someone going on a missions trip write off the expense of the trip as tax deductible giving?

Answer:

First, let's review some material that I included in an October 17, 2009, posting. IRS Publication 526 addresses "Out-of-Pocket Expenses in Giving Services" and travel costs. The Publication offers several principles:

"Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be 1) unreimbursed, 2) directly connected with the services, 3) expenses you had only because of the services you gave, and 4) not personal, living, or family expenses."

Car expenses can be deducted at 14 cents per mile (2010 rate) for documented charitable miles. Regarding travel expenses specifically, Publication 526 states:

"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."

The Publication lists the following expenses as deductible: "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."

It seems that the only unanswered question above relates to giving toward a specific person's mission trip. As long as the gifts are disbursed by the church or Christian ministry only to cover non-personal expenses (as discussed above) and no personal benefit is received by the donor or the recipient, the contributions are deductible. Any excess donated funds cannot be given to the missions team member. They can be used for other members' expenses or future trips. I recommend that this policy be stipulated to members of the team. It is probably wise to also advise donors that all contributions once received are under the control and discretion of the church or ministry. Contributions intended for team members who must cancel their participation or who become disqualified are then redirected to other charitable purposes related to the missions trips or other activities of the ministry.

2 comments:

  1. Wife went to Africa on missions trip. Could I deduct out of pocket expenses like food at airports, passport expense, medical expenses for shots? Trip occurred in January 2013, incurred in 2012 (medical paid in 2013). Also, where and how to record it on tax form. Thanks!

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  2. As referenced in our February 21 blog post Travel for Mission Trip Deductible as Charitable Donation, excess expenses can be deductible as charitable contributions.

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