Missionary: "Everything I spend is related to my ministry."

Question: 

What business expenses can missionaries count to reduce taxable income? Many missionaries feel like their whole life is doing "ministry", therefore they think most expenses are "business" expenses when overseas (such as food, clothing, travel, housing). When a missionary is on furlough (stateside assignment) are their expenses in the states considered business expenses?

Answer: 

Almost any business expense permitted for a business owner is also permitted for missionaries. Missionaries whose work requires them to incur expenses as part of their work may deduct any qualifying work expenses. Read IRS Publication 535 for a full explanation of business expenses. Typically, food, clothing and permanent housing in a foreign country are not business expenses. However, local transportation associated with mission work is deductible.

Travel during furlough involves a detailed understanding of “travel away from home” rules which are more extensive than can be rehearsed in this blog entry. In our experience, well established mission agencies are usually better qualified to assist missionaries with business expense reporting than a missionary on his/her own. Therefore, our advice for missionaries is to check with their mission agency.