User Support Forum

If you give an offering to a specific missionary not to an organization is the amount considered
a tax deductible contribution? If it is not tax deductible, do you still include it in contribution
reports. We are taking an offering every month for this missionary (in India)

As far as contributors who give money to the church for any purpose that the church deems religious activity * , they are making a tax deductible contribution. Even if the contributor has a pretty good idea what the offering is being used for, it is technically the discretion of the church to honor the request.

* This does not include paying registration fees, buying books, etc. where the donor receives tangible items in return for their donation.

As far as paying money to a missionary from the church (assuming they pay taxes in the US), there are several issues. I found this information which is taken directly from Richard Hammers "Church and Clergy Tax Guide".

http://www.ag.org/top/Church_Financial_ ... trions.cfm

If you don't have Richard Hammer's Tax Guide, I highly recommend getting it.

The main points are these:
-You should issue the missionary a W2 or 1099 depending on certain criteria.
-The missionary may be eligible for the foreign income tax exemption, anyway.
-The missionary may be required to provide quarterly information as to their activity.

Do you show the amount given on personal contribution statements but show them as love offerings?

We do it this way. I show as much detail as possible on the Contribution Fund Description (which gets printed out on the individual's contribution statement when showing Full Fund Details). At the end of the year, we print the tax statements two ways. One is to use all the details, and the second is to use only the total amount. The first is so they can check their giving records against the statement. The second is to include with their tax returns (showing no detail - just the total dollar amount given), unless a single donation of over $250 is given, in which case you have to provide the amount and a disclosure statement like "on amounts over $250 no benefits were received other than non-tangible religious benefits". (I haven't checked the $250 limit lately, by the way)

So, to directly answer your question, I would name the Contribution Fund "John Smith - India" or something like that. You can use a more generic title such as "Love Offerings" as well.

mocat wrote:If you give an offering to a specific missionary not to an organization is the amount considered
a tax deductible contribution? If it is not tax deductible, do you still include it in contribution
reports. We are taking an offering every month for this missionary (in India)

While I don't often disagree with John on things, I do believe that if a church is collecting an offering for a SPECIFIC missionary and just passing that on, then that offering is NOT tax deductable.

From IRS Pub 526, Charitable Contributions:

Contributions to Individuals:

You cannot deduct contributions to specific individuals, including the following.

* Contributions to fraternal societies made for the purpose of paying medical or burial expenses of deceased members.
* Contributions to individuals who are needy or worthy. This includes contributions to a qualified organization if you indicate that your contribution is for a specific person. But you can deduct a contribution that you give to a qualified organization that in turn helps needy or worthy individuals if you do not indicate that your contribution is for a specific person.
Example. You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization. However, you cannot deduct contributions earmarked for relief of a particular individual or family.
* Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses.

* Expenses you paid for another person who provided services to a qualified organization.
Example. Your son does missionary work. You pay his expenses. You cannot claim a deduction for your son's unreimbursed expenses related to his contribution of services.

* Payments to a hospital that are for a specific patient's care or for services for a specific patient. You cannot deduct these payments even if the hospital is operated by a city, state, or other qualified organization.


However, if the church collects contributions for general missions, and that is then issued out to missionaries that the church supports, the contribution can be deducted.

I know this because we went through this at a previous church I was at. Our Finance Elder, who was a CPA was VERY specific on this point. We can collectively support missions, but we cannot individually target a specific missionary on an individual contribution basis.

Thanks for the correction, Neil. I'll need to look at our practices to make sure that we are not in error.

So, to directly answer your question, I would name the Contribution Fund "John Smith - India" or something like that. You can use a more generic title such as "Love Offerings" as well.

For those who read this quote of mine above, don't do this. I will have to correct this practice on our books as well.

John

I know this post was last year but would like clarification.
What if we have a special speaker and at the end, they say we are going to take a "Love Offering" for him. If someone puts "For _(name)__" on the giving envelope, is that a tax deduction for the donor?

What if he does not put anything on the envelope? If that works, should we instruct donors to not write that on the envelope? Or is it not a deduction anyway because we said the whole offering was going to him and donors knew they were giving to the visitor?

The help menu in PC+ says that this Love Offering would be a "Pass-Through" contribution and the funds never belonged to the church, they were just passed through. If they never belonged to the church, wouldn't that indicate that it was a gift from each donor directly to the visitor?

Just don't want us or our members to have IRS problems!
Thanks!

Quite often, our guest speakers request that when we write them a check, we make it out to their non-profit organization, rather than the individual. This is the case for the pass-through contribution. The donors make out their checks to "our church", and we write a check to "his or her church or organization".

If the individual represents themselves, and not another non-profit, we take up an offering to "our church", and write a check of any amount to the speaker. Sometimes we add to it, sometimes it equals the amount collected, but it is up to the church board, and therefore qualifies as a tax-deductible contribution for the donors. (It would be a 1099 check to the speaker, by the way).

I know that this board isn't the IRS, and so I ask with that in mind.

However, I consider some questions. If it is against charitable contribution law to designate for a specific missionary, how do we support missionaries? I personally send checks to other non-profit orgs (mission boards) for specific missionaries in their system, and those donations are deductible. Why then cannot the church do the same--accept donations for a specific mission area or program or missionary?

bigspringscc wrote:I know that this board isn't the IRS, and so I ask with that in mind.

However, I consider some questions. If it is against charitable contribution law to designate for a specific missionary, how do we support missionaries? I personally send checks to other non-profit orgs (mission boards) for specific missionaries in their system, and those donations are deductible. Why then cannot the church do the same--accept donations for a specific mission area or program or missionary?

A person can give to a church an amount to the general missions fund, what the church then does with the amount given to the general fund is up to the leadership (Session, Vestry, Trustees, etc) of the church. If the church then decides to support a particular missionary, its OK as the church as a whole is supporting the person. However, that person cannot be the sole beneficiary of the mission fund.

When a church gives to a mission board, and says that its for a specific missionary, I suspect that anything over and above what is needed by that missionary is then shared. I cannot be certain of it, but its a good assumption.

Its best to get a copy of IRS Pub 526, which covers Charitable Deductions. Here's the part that covers contributions to an individual, again, this is for a person that is giving funds. Note the parts I've highlighted which covers this question:

Contributions to Individuals
You cannot deduct contributions to specific individuals, including the following.

• Contributions to fraternal societies made for the purpose of paying medical or burial
expenses of deceased members.
• Contributions to individuals who are needy or worthy. This includes contributions to a
qualified organization if you indicate that your contribution is for a specific person.
But you can deduct a contribution that you give to a qualified organization that in turn
helps needy or worthy individuals if you do not indicate that your contribution is for a
specific person.

Example. You can deduct contributions for flood relief, hurricane relief, or other disaster relief to a qualified organization. However, you cannot deduct contributions earmarked for relief of a particular individual or family.

• Payments to a member of the clergy that can be spent as he or she wishes, such as for personal expenses.
• Expenses you paid for another person who provided services to a qualified organization.

Example. Your son does missionary work. You pay his expenses. You cannot claim a
deduction for your son’s unreimbursed expenses related to his contribution of services.

Hope this helps.