Ask the Experts: U.S. Taxes and Missionaries. Did you know that serving in another country does not exempt you from U.S. tax responsibilities? Missionaries living overseas who are U.S. citizens must still file a tax return, regardless of where they live or in which country they earned the income.

How do I report missionary income?

Missionaries typically file their taxes as self-employed individuals, reporting any stipends and honorariums on a Schedule C. The tax code includes a number of provisions available to missionaries as members of the clergy or religious workers.

When do I have to file my tax return as a minister?

Of course, neither do you get credit toward Social Security or Medicare benefits in retirement. You must file Form 4361 by the due date of your tax return for the second tax year in which you earned at least $400 of self-employment earnings as a minister. Once you claim the exemption, you cannot revoke the election.

Can a minister request exemption from income tax?

You can request an exemption from self-employment tax for your ministerial earnings, if you’re opposed to certain public insurance for religious or conscientious reasons. You can’t request exemption for economic reasons.

How much income does a minister report on her 1040?

She will report on her 1040 as income $53,000 ($52,500 net salary plus the $500 of unused utility allowance). However, her income for self-employment tax purposes is $84,000 ($60,000 gross salary plus the $24,000 fair rental value of the home).

Can a certified tax preparation software be used with NETFILE?

Only tax preparation software and web applications certified for use with NETFILE can be accepted through the NETFILE web service. If you buy your software package before it is certified for use with NETFILE, you may have to download an update from the software developer.