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No, you do not need to notify the Federal IRS or state tax system when you move to an international location.  However, Reliant must be notified any time you travel to or from the US so that we can report your taxes accurately.  Use the Travel Notification Form for notifying us of all travel outside your home country. 

Once After you are Released to Assignment and have moved to your location, Reliant makes note that you are in a foreign location and don't have to pay state taxes.

What about payment of state taxes? 

Since you are no longer residing in one of the 50 states, Reliant does not pay taxes for you. If  If for any reason you need those paid, you'll need to ask Reliant for that. If you have state tax obligations after you leave the U.S., you may need to attend to those on your own. 

• Note, when you return on furlough, we keep you listed as a foreign residence because furlough is a temporary work assignment. It is not a relocation of residence. So, our default is to NOT pay state taxes during furlough. Contact Reliant if you have an obligation that's different from this. 

Am I responsible for reporting and paying U.S. Federal Income Taxes while living an international location?

A U.S. citizen is ALWAYS responsible to file report and file their tax returns EACH year, no matter where they live. When residing outside of the U.S., the deadline for filing is always June 15.

What is the Foreign Earned Income Exclusion? 

Many who live outside of the U.S. for more than a year qualify for the Foreign Earned Income Exclusion; this greatly reduces the amount of tax that needs to be paid for many people. You may qualify. In 20142018, an eligible foreign worker can exclude up to $99$102,200 of 100 of income from federal income taxes. Read about the Foreign Earned Income Exclusion and speak with your tax advisor for more details. Be sure to submit an accurate W-4 form to Reliant to avoid having too much federal income taxes withheld from each paycheck and receiving a large income tax refund when living on a needs-based salary.

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• If you don’t want to pay Federal Income Tax, you may ask the Payroll Department for that. They will guide you in updating the necessary forms (mainly your W4).
• Similarly, if you want a specialized amount withheld, you may work with Payroll to do that.

How do I qualify for Foreign Earned Income Exclusion? 

Reliant strongly urges all missionaries to consult a tax specialist regarding these matters.  IRS tax forms 2555 and 2555EZ guide the qualification and reporting of this exclusion.  

In most cases, a foreign worker first establishes foreign residency using the Physical Presence Test.  Physical Presence requires the worker to reside and work outside the US 330 days within a year.    Once a foreign worker establishes residency, they are "Bona Fide Residents".  A Bona Fide Resident is no longer required to pass the Physical Presence test and stay in US for longer than 35 days.  Their residence began when they first started their foreign residence. 

Do I lose the Foreign Earned Income Exclusion when I return for Furlough? 

Furlough is a temporary work assignment in the US.  It does not constitute a change in residence in most circumstances.  Therefore, it does not interrupt "Bona Fide Residence" of someone utilizing  the Foreign Earned Income Exclusion. 

IRS form 2555 will ask how many days you worked in the US, and you will need to report that.  Technically, earnings for work in the US are taxable ; however, due to the standard deduction level, a Reliant missionary rarely owes more tax during a furlough. 

Does accepting parsonage as an Ordained Minister lower the person's Social Security and Medicare tax liability? 

No, the pastor parsonage allowance only relates to Federal Income Tax obligations.  If the staff member is participating in Social Security and Medicare,  they would still have to pay Social Security and Medicare (15.3% total) on the parsonage as well as on their which is a portion of their total taxable income.

For most many international staff . if they who qualify for the Foreign Earned Income Exclusion, the parsonage does not typically lower their tax liability since the Foreign Earned Income Exclusion exempts them from paying federal income taxes on any earned income under $97$102,600 (as of 2013100 (for tax year 2018).

401k and Reliant 

Reliant does offer an employer match. Reliant matches up to 5% of your salary in a contribution (if you contribute at least that much through payroll deductions – i.e., a match). The source of the employer match is from funds raised to the MTD account that funds your ministry (so you have to raise the match). Reliant allows you to choose whether funds are contributed “Pre-Tax” or Roth. Naturally the match is never post-tax, although there is a conversion process if you want your employer match converted to Roth funds. You can find more information at 401(k) Retirement Plan. 

Who can I talk to for help with tax decisions?

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