June 28, 2016

Missions Work Away from Tax Home

Question:

A missionary is doing mission work for less than one year away from his tax home. 
1.) Is he considered to be on a business trip the whole duration of the trip?
2.) What deductions is he able to take?
3.) May a self-employed person use the standard meal allowance?

Answer:

In this situation, the missionary is considered to be on a business trip/temporary assignment according in to IRS Publication 463. On page 4 the publication states, “Generally, a temporary assignment in a single location is one that is realistically expected to last (and does in fact last) for 1 year or less." 

One must then consider what expenses are allowable as deductions for a temporary assignment. Pub 463 states, “You can deduct ordinary and necessary expenses you have when you travel away from home on business. The type of expense you can deduct depends on the facts and your circumstances.” Table 1-1 in the publication provides a quick summary of deductible business expenses. 

According to page 6 of Publication 463, "You can use the standard meal allowance whether you are an employee or self-employed, and whether or not you are reimbursed for your traveling expenses."

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