Cross Roads Brethren in Christ Church 800 Donegal Springs Road Mount Joy, PA 17552
Church Board approved: April 8, 2013
Summer is popular time for many churches to spread their ministry beyond the walls of their church. Whether the mission trip is an hour away or halfway across the globe,there is a substantial tax benefit available to people donating towards a mission trip. Many people that donate to, or go on, a mission trip do not receive the full amount of tax benefits they are entitled to.
Donations (by non-participants)
Since the church is a qualified charitable organization, individuals are able to deduct any cash donations to the church for the mission trip, as long as the church is in control of the funds donated. Gifts to a specific person (or made to the church and flagged for a specific person) to attend the mission trip are considered a gift and are not tax deductible. In order for the donation to stay tax deductible, donations should be made directly to the church/mission group and not marked for any individual. If the donation is made to a qualified charitable organization and is not indicated that the contribution is for a specific individual, it is tax deductible.
Cash donation to church – tax deductible
Cash donation to individual, to be used for the trip – not tax deductible Check payable to church, no “memo” – tax deductible
Check payable to church, “memo for mission trip” – tax deductible
Check payable to church, “memo for person” – may not be tax deductible
Fundraising activities may be done by the organization, or individuals involved in the trip. There are guidelines that must be followed, to ensure the funds are handled appropriately, that tax-deductible status of the donation is maintained, and no individual consequences are incurred.
In some trips, individual will be raising funds toward the cost of their participation in the trip. Since this can be viewed by the IRS as ‘gifts for a specific person’, there are guidelines that should be followed in order for these contributions to be considered tax-deductible. The key points are:
To support these guidelines, a form similar to the one on the following page should accompany each donation that the donor wishes to be tax-deductible. The check, payable to the church, should not indicate any individual’s name. This gives the church complete control over the use of the donated funds, and allows the donation to be considered a tax-deductible contribution. Contributions intended for team members who must cancel their participation, who raised more than the needed funds, or who become disqualified for any reason are then redirected to other charitable purposes related to the missions trip or other activities of the ministry.
Contributions are Non-Refundable
Please complete only if you wish to receive a tax deduction for your donation.
(Click for printable PDF form)
Each individual that is going on a mission trip is responsible for raising a percentage of the total cost of the team’s trip. According to IRS Publication 526 on Charitable Contributions, a contribution designated for a specific person is considered a gift and should NOT be listed on a donor’s contribution statement. However, by completing and returning this form in its entirety with your donation, you are indicating that your donation is for the benefit of the team and not a specific person which will then allow this donation to be considered a tax- deductible contribution on your contribution statement.
If we do not receive this form with your donation, we will understand that you wish to make your donation a gift, and you will not receive a contribution statement for tax purposes. If this is the case, we ask that you please write the individual’s name as well as the trip name in the memo section of your check.
If you wish to receive a tax deductible contribution statement for your donation, please initial BOTH statements and fill in the portion below. If you don’t wish to receive a contribution statement for tax purposes, you don’t need to complete this form:
I understand that I may indicate a specific person that I would prefer to receive the benefit of my contribution but grant Cross Roads Brethren In Christ Church complete discretion and control over the use of my donated funds to best benefit the Missions Teams or Outreach Ministry.
I understand that my contribution is non-refundable.
The person I would prefer to support is:
He/She plans to go on a Missions trip to:
The amount of my donation is $_ . Check #
Your mailing address:
Name (please print legibly) ________________________________________________
Street Address _________________________________________________________
City, State & Zip ________________________________________________________
Since trip participants have the potential to receive some personal benefit from a trip, the “rules” for donations for participants are different. A clear accounting of costs and benefits must be documented, to ensure that the correct portion of their contribution is tax-deductible.
Although trip participants cannot deduct the value of their services during a mission trip, they may be able to deduct some amounts they pay in giving services during a mission trip. The amounts must be:
Generally, a charitable contribution deduction can be claimed for travel expenses necessarily incurred while 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 the expenses are paid directly or indirectly. Expenses are paid indirectly if the payment is made to the charitable organization and the organization pays the travel expenses (the typical approach for church mission trips).
The deduction for travel expenses will not be denied simply because the participant enjoyed providing services to the charitable organization. Even if the participant enjoys the trip, a charitable contribution deduction can be taken for travel expenses if the person is on duty in a genuine and substantial sense throughout the trip. However, if the person has only nominal duties, or if for significant parts of the trip the person does not have any duties, travel expenses cannot be deducted.
Deductible travel expenses include:
Non-Deductible travel expenses include:
Travel expenses are deductible ONLY on days where mostly charitable work is performed and there no personal pleasure involved (besides the pleasure of ministry). Travel day are considered “work” days
when it comes to the deductibility of expenses. Side trips or other sightseeing activities are not considered charitable expenses.
To prove the extent and duration of volunteer services, the trip leader should keep an itinerary of the entire trip. The itinerary should separate those times when the participants are on duty for the charitable organization from those times when the participants are free to choose his or her activities. Any detailed documentation and/or photos to support the itinerary should be saved.
Donations by participants should be tracked separately from non-participants, and appropriate documentation (receipts, work itinerary, etc.) must be available, so tax-deductible amounts can be calculated for the participants. If itemized costs can be obtained from the sponsoring organization, that is helpful. A proper written acknowledgement of donations and tax-deductible status can be issued to participants by the church after the trip’s completion.
Participants are responsible for tracking/documenting any personal expenses that are not included in the “mission trip costs”, that they want to use for tax purposes.
Participants cannot “sponsor” another participant or have their trip costs paid by another individual’s contributions, in an attempt to treat their own contribution as completely “tax-deductible”.
As the church plans its mission trips, it should pay close attention to the itinerary on an hour by hour basis. The church may allow for some limited sightseeing and personal time, but the primary purpose of the trip should be to render charitable or religious services to others. Most of the time should be devoted to volunteer work.
Some advisors have used the foreign business travel rules as an analogy with the charitable deduction rules. For example:
It is recommended that churches plan their mission trips to meet both the charitable rules and the business travel rules. The trip should schedule participants to work the vast majority of the days. The work should take up the majority of the work day. The church should prepare a detailed itinerary of each day’s planned activities. If the requirements of foreign business travel rules are met when traveling as a charitable volunteer, there is more likelihood of success in deducting the volunteer expenses related to that mission trip as a charitable contribution.
Mission Trip Tax Donation Form. (2011, 09 21). Retrieved 03 02, 2013, from Habhak - Cross Point Community Church: habhak.files.wordpress.com/.../mission-trip-tax-donation-form.docx
Baughman, B. (2011, 02 08). Accounting for Short Term Mission Trips. Retrieved 03 02, 2013, from Faith Based Accounting: http://faith.pskcpa.com/2011/02/accounting-for-short-term-mission-trips.html
Clergy Financial Resources. (2011, 07 11). Deduct Expenses Related To Church Mission Trips On Your Taxes.
Retrieved 03 02, 2013, from Clergy Tax Law Blog/Clergy Financial Resources: http://clergytaxlaw.wordpress.com/2011/07/18/deduct-expenses-related-to-church-mission-trips-on- your-taxes/
Frank Sommerville, J. C. (n.d.). Making Your Mission Trips Deductible. Retrieved 03 02, 2013, from WEYCER, KAPLAN, PULASKI & ZUBER, P.C.:
Internal Revenue Service. (2012, 11 17). Publication 526, Charitable Contributions. Retrieved 03 02, 2013, from IRS: http://www.irs.gov/pub/irs-pdf/p526.pdf
Judith G. Edington, E. (n.d.). Fundraising Events: What is Deductible. Retrieved 03 02, 2013, from MassNonProfit.org Inform, Share, Thrive: http://www.massnonprofit.org/expert.php?artid=1968