I have been a traveling evangelist for many years. Are there things that I should be doing that will help me reduce my tax liability?
Yes. First of all, you should establish a housing allowance. The Code says that the organization in which you are a part of should set up a housing allowance by resolution. This is a simple process but can save you several hundred dollars in taxes.
If you are traveling and have a travel trailer or motor home, you should be paying rent at the location in which you receive your mail. If you can’t establish a formal residence and don’t incur expenses at that location, the IRS will consider you as an itinerant and then all travel expenses are not deductible.
You should also provide the church where you are ministering with the number of miles you have traveled from the last church. This will help you in your verification of the travel expenses should you receive a notice of an audit. It also gives the church information as to your expenses between churches so they can reimburse you for this travel. It is normal for a church to pay for airfare when traveling using air travel between churches, so paying of mileage expenses should be a normal process and a routine one for the church.
Recordkeeping is a must. You have to verify your expenses. Being a traveling evangelist makes you more vulnerable to an IRS audit. It is a known fact that individuals who use a Schedule C on their tax return have a greater chance of an audit than those who don’t. So good recordkeeping is a must.