Do I fill out name of my church plant for Sched C-EZ Part I (C), this is for gift received from another church for my independent work to plant church in another state?

[Nicola]

The giving church is providing a small gift every month, can they designate it as housing allowance so that I can save on income taxes? I am not employed by the giving church, but work independently as a church planter. Thanks.

[CarolC · Accepted solution]

You can include the gift as business income since you are receiving the money for your church planting services.  This will be reported on your Schedule C.  You can simply enter your first and last name as the name of your business.  Any income that you received as a nonemployee will get reported there.  You can also deduct any expenses you incurred while performing your independent work on your Schedule C as well. 

When the church provides income as a parsonage allowance (housing), then the rental value of that income is eligible to be excluded from income tax, but must be reported as self-employment income on Schedule SE.  A church cannot simply call the income a housing allowance.  The church has to meet reporting requirements to provide this benefit.

[Nicola]

I have set up the church plant (church under the tax exempt umbrella of our denomination) with its own EIN, should I use the church plant name for the business, instead of my name.  The gift was to me personally though, not the church plant. Thanks!

[CarolC]

@Nicola For this income, it sounds like your role is more of a consulting nature.  You helped set up a new church and you were paid for your services.  Therefore, you should use your own name on the Schedule C, which is tied to your Social Security number (you would not put the payor's name as your business name).  Also, religious facilities are tax-exempt entities and generally do not report income.

[Nicola]

Thanks, and to clarify: the gift was from a separate church organization, not the church plant. You are correct that the gift is to support my work for the church plant. The church plant does not have any paid workers, although I am a church official of this church plant. So I still show my own name on Schedule C, as the gift is to me as an individual, and not for the church plant, correct?

[villi]

Can I deduct expenses paid out of pocket to start a church plant. I have started a church plant that I have paid to become a 501c3 and other expenses out of my pocket and I would like to know if any of the expenses can be deducted now that the church is a 501c3. Also would they be deducted as a business expense or as a donation?