This page contains information concerning the taxation of those who serve the Lord fulltime, or fulltimers, and answers to frequently asked questions.
Click here for detailed information on filing your income tax return as a fulltimer.
Click here to see a sample tax return for Tommy Fulltimer.
Click here for detailed information on filing your income tax return as a fulltimer serving abroad.
While you should receive a 1099 if an organization pays you $600 or more during the year, you are responsible for reporting all your income whether you receive a 1099 or not. You may also have income that is not subject to 1099 reporting, for example if you received less than $600. Report the total income you received for the year on your tax return, whether or not you received a 1099.
Whether money received by you is income or not depends on the nature of the payments, not the label attached. If you receive money from a church or organization because of your services as a fulltimer, then it is income to you, regardless of what the organization calls it. Money received from an individual, e.g., from the offering box, is generally a gift and not taxable to you. However, if you were given the money because you performed a service for the individual, such as a wedding or a funeral service, it would be taxable income to you.
The standard mileage rate can be used in place of actual expenses for business mileage. The rate changes every year. For 2019, the rate is 58¢ per mile; for 2020, it is 57.5¢ per mile. Click here for rates for earlier years.
A per diem amount can be used for meals and incidental expenses when travelling on business. The rates change annually and are published by the State Department. Here are links to domestic per diem rates and foreign per diem rates.
Charitable contributions to a church, both cash and non-cash, are only deductible on Schedule A, Itemized Deductions. They can never be deducted on Schedule C as a business expense.
Our income tax system is a pay-as-you-go system. If during the year you have not paid in 90% of your total tax through withholding or estimated payments, you will be charged a penalty. To avoid the penalty, you have to pay your tax during the year, either as withholding or estimated payments. On a joint return, payments and withholdings from both spouses are included.
Estimated payments are due on April 15, June 15 September 15 and January 15. Use Form 1040-ES. You can make payments online through the EFTPS system or when you e-file your tax return. Click here for more information.
Please call me before you respond to the IRS. You can represent yourself at the audit or you can have someone else represent you. In either case, I can help you prepare for the audit and avoid some common pitfalls.