Mywife and I recently returned from a six-month mission trip. We were sent andsupported by our church congregation. Our flight, living expenses, and mortgageback home were all covered by the church. We weresupported directly by our home church as missionaries (no missions’ agency wasemployed). We received a Form 1099-MISC from the church listing all of oursupport as “Non-employee compensation.” How will I report this to make our tripexpenses balance out?
Answer:
Non-employeecompensation reported on Form 1099-MISC is included on Schedule C of IRS Form1040. This Schedule allows business expenses to be deducted directly fromincome. In your case, business expenses will include your deductible tripexpenses assuming you have adequate substantiation of the expenses as requiredby the IRS. Payments on your home mortgage are not deductible businessexpenses.
Themembers of my Federal Taxation I class at Maranatha Baptist Bible College inWatertown, Wisconsin have taken on the challenge of study and research toanswer posted questions. Dan Chodan of Lancaster, Pennsylvaniagets credit for this one.
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