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Be aware of the tax implications when deducting expenses for mission trips

Short-term mission trips are often an integral part of the local church’s ministry efforts. However, the administrative issues are numerous and complicated for the church (as well as for donors and participants) in order to comply with tax regulations for a charitable deduction.

For simplicity purposes (and to limit the length of this blog article), let’s focus on one possible scenario, and that is that the participant pays for their own travel costs. (There are several other possibilities that are not addressed in this article including minors going on mission trips and who pays for them, does the church reimburse participants for travel costs, does the church or the participants solicit contributions specifically for the trip…and others.)

For participants who pay their ‘own way,’ there are a couple of basic things to keep in mind so that they can deduct the cost of their charitable travel. First, assuming a participant is entitled to a deduction for unreimbursed travel costs, the church should issue some kind of acknowledgment (if these costs are greater than $250) that states, among other things: that the donor received no goods or services in return (assuming this is the case); a description of what was donated and the purpose of the trip; and if possible, the amount of the participant/donor’s unreimbursed travel costs.

The second component that needs to be present is that the participant/donor received no significant element of personal pleasure in connection with the mission trip…this would include vacation, recreation and/or personal pleasure. Unfortunately, tax regulations do not define “significance” so there’s a logic filter that needs to be used (and then documented). It’s certainly not a problem for participants/donors to get the joy that comes from serving Him by serving others. However, if a participant does not have specific duties on the trip for large segments of time, the question could be raised as how much is personal pleasure versus how much is mission related.

“For heaven’s sake” (literally), don’t let some fairly complicated tax rules and requirements stop your church from conducting mission trips when both the recipients and participants are blessed. Hopefully, you’ll now be aware of the tax issues that need to be covered so that participants are entitled to legitimate personal deductions.

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