Receiving and Reporting donations through 501c3 organization

[rebmaboss]

I'm a missionary switching focus from Russia to South America.  When I worked in Russia, I received donations through a 501c3 organization that "hired" me as an "employee." Now that I'm going to South America, I'm planning to serve under a new 501c3 organization that works in South America.  That organization does not "hire" anyone -- everyone serving with them is an independent missionary.  I'm wondering if the following process for receiving funds would be legal and / or correct:

1) My donors write checks payable to this 501c3 organization or use PayPal to send the 501c3 a donation.   My donors can call me and say "We've sent this organization this much money for you," but since the 501c3 organization has complete control and decision over the donation, the money is tax-deductible from the donor's side?

1a) Is this money still tax-deductible if my name is written as a Memo / note but the money is donated to the organization itself?

2) I perform services for this 501c3, so even though I'm not an "employee", they can pass me donated money as payment for my services.

3) I keep track of the value of all the payments and record it on 1040 Schedule C, etc. as I am self-employed

3a) Is the 501c3 required to give me a 1099, or is it enough that I keep track of all the income myself?

[rjs]

NOTE: THE OP CHANGED THE QUESTION AFTER REPLIES WERE POSTED. SEE BELOW.

In the original question he said he was a volunteer, and he said that donors send money to him through the 501(c)(3) organization. The following is my reply to the original question.

You're not a volunteer if you are getting paid. It appears that the organization is paying you for services that you perform for it. If you are not an employee of the organization, then you are self-employed. The legality of that arrangement is debatable, and might be affected by the fact that you are working in a foreign country.

The bigger problem is on the other side of the arrangement. The donors cannot claim a tax deduction for a donation that is designated for a specific person. If the organization is representing to the donors that their donations to you are tax deductible, that is clearly illegal.

[pk]

@rebmaboss ,  depends on the organizations policies.  The only real difference fr you  is that as a W-2, the entity withheld the taxes  and Social Security / Medicare for you. Under the new arrangement, you are responsible to pay the US taxes and Self-employment taxes.  You should consider paying US taxes quarterly ( estimated  taxes).  Social Security and Medicare taxes  also may have to be paid  depending  your denomination and how it is registered ( vow of poverty  etc. ).   Note that if you meet the eligibility of foreign earned income exclusion then  you may be able to exclude the income altogether from US taxes  ( you may still have to pay medicare and social security ).  Obviously  you may have to pay taxes to your work country , depending on the tax laws there -- I am somewhat familiar with Brazil not not the other countries in SA.

pk

[rebmaboss]

@rjs  @pk Thank you for your thoughts!  My question was all over the place, so after taking into account what you said, I've updated my initial post / initial question.

[rjs · Accepted solution]

Replying to the modified question.

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@rebmaboss wrote:

3a) Is the 501c3 required to give me a 1099, or is it enough that I keep track of all the income myself?

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Assuming that the organization is a U.S. organization, they are required to give you a Form 1099-NEC if they pay you $600 or more for services in one year.

For your other questions, it seems iffy to me. You might have to dig into exactly how the organization decides how much money to send you. If the amount that they send you is based entirely on what you do, and has no relation to how much "your" donors give, that would seem to be okay. On the other hand, if the amount that they send you is based on the amount that "your" donors contribute, that would imply that the donations are designated for you and are therefore not tax deductible, no matter what is written on the check or any other related communications.

You might want to consult a tax lawyer. Note that the deductibility of the donations is primarily a problem for the donors, not for you. However, if you are soliciting directed donations and saying or implying that the donations are tax deductible, that could be a problem for you.

And, of course, you have to keep good records of your income and report all your income, whether or not you get a 1099-NEC.

[rebmaboss]

Thanks!  Marked as best answer for my edited post, although I've been misunderstanding the situation.  I'm actually completely a volunteer.  That changes the situation entirely, and I'm writing a new question about that.  

[Bsch4477]

You write:

2) I perform services for this 501c3, so even though I'm not an "employee", they can pass me donated money as payment for my services. 

You are receiving income. If you are not an employee then you are a self employed independent contractor.