- quote -

Last time I researched it, ordination was NOT a requirement
for dual status.

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L K Williams wrote:
- quote -


- quote -

Ah, thanks for the info there. I think I only had one
client once upon a time who had worked beyond the U S
borders (Indonesia as I recall).

Normally a foreigner around these parts is someone either
north of the Mason Dixon line or west of the Pecos.

Cheer$,
HL

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JayBee wrote:
- quote -

Or one of my favorites: "facts and circumstances".
"f & c". yes, has a nice ring to it.

Cheer$,
HL, EA in LA

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"Harlan Lunsford" <hlunsfordnoway[at]bellsouth.net> wrote:
- quote -

Agreed. That's why I stated "ordained ministers". One of
the other CPAs in my office had a W-2 for a client from a
large local church. The W-2 was issued to an off-duty
police officer who provides traffic control at the church.
The W-2 had no FICA tax withheld. I believe the failure to
withhold was in error, but I'm not the payroll department
for the church. Other churches I've worked with withhold
FICA for everone except those who are ordained. I once
worked with an Episcopalian church that didn't recognize
ordinations from other denominations.

- quote -

Again, I agree. I should have used the standard tax
answer, "It depends".

--

Joel Berry, CPA
Sugar Land, Texas

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"Harlan Lunsford" <hlunsfordnoway[at]bellsouth.net> wrote:
- quote -

The foreign income exclusion is available to any taxpayer
who meets either the physical presence rule or the bona fide
residence rule. Whether they work in a country with an
income tax is not part of the qualifications. In fact, it
isn't even necessary to work in just one country.

If the missionary is actually living in the Asian country,
she should be able to meet the bona fide resident rules,
which are generally preferable to the physical presence
tests.

There was nothing in the original post that indicates she
would not qualify.

I live and practice in Asia myself and have seen this
situation before.

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Joel Berry, CPA wrote:
- quote -

However, not all missionaries are ordained ministers.

- quote -

Doesn't that foreign income exclusion have to do with
countries who also levy an income tax subject to treaty
(maybe?) with the U.S.?

Cheer$,
Harlan Lunsford, EA in LA

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"Bill" <wcharriscpa[at]nospamhotmail.com> wrote:

- quote -

My clients who are ordained ministers receive W-2s with no
FICA withholding. They report the income on page 1 of form
1040 as wages and salaries, but also file schedule SE
reporting their income for self-employment tax purposes.
Ordained ministers may "opt out" of the social security
system. If they do so, they are not subject to the
self-employment tax.

- quote -

She should be able to claim the foreign income exclusion,
assuming she meets all of the requirements for doing so.
The fact that she is a missionary should not affect her
ability to do so.

Joel Berry, CPA
Sugar Land, TX

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Hello everyone.

My mother became a missionary in an asian country a couple
of years ago. She is affiliated with a church organization
and this is how the operation works:

1. People send monthly support ($) to the organization,
designating the funds as "for her" although checks are
made out to the organization.
2. That organiztion deposits the funds into her stateside
account, but not until she requests disbursements.
3. At the end of the year, she receives a W-2 for the amount
of funds that have been deposited into her stateside
account -- but there is no fica/ss or fit withheld.

.....and now my question.

I've simply never seen a W-2 with no withholding on it. Are
they (both the church organization and my mom) handling this
properly?

The organization maintains that she is self-employed and
owes self-employment taxes on the funds. How is she
"self-employed" if she gets a W-2?

Does she file the W-2 income on the front page of a 1040 or
can she use Schedule C (and thus take business expense
deductions)?

Can she claim the foreign-earned income credit? (she is in
the asian country all year)

This is too weird for me.

Many thanks to anyone who could shed some light on all this.

-Bill in TX

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