Do I need to notify the IRS or the state government for tax purposes when I move to an international location?

No, you do not need to notify the Federal IRS or state tax system when you move to an international location. 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. 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 US, 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 re-location of residence.  So, our default is to NOT pay state taxes during furlough. 

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

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

Many who live outside of the US 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 2014, an eligible foreign worker can exclude up to $99,200 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.  

The current international SGW assumes you will not be liable for federal income taxes. The default is for Reliant to pay Federal Income Tax according to what you have submitted on your W-4 during New Staff Training. 

Withholding from your paycheck happens regardless of whether you make a budget category in your Support Goal Worksheet for Federal Income tax or not.  Part of the reason that is done is because most missionaries begin their employment while still in the US, and taxes would be due on that employment.  In addition, those who qualify for the exclusion receive the money back in their tax return, and it becomes “salary”. 

• 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.

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

No, the pastor would still have to pay Social Security and Medicare (15.3% total) on the parsonage as well as on their taxable income.  For most international staff if they 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 $97,600 (as of 2013).

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 – ie, 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 is 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?

Reliant can not make recommendations about tax decisions, so it is the missionary's responsibility to seek that input from a financial advisor or tax specialist. Below is a list of tax specialists that other international missionaries with Reliant have consulted:

What U.S. banks are recommended for international missionaries to use?

Missionaries are free to use any bank they'd like! In the event that a missionary is looking for bank recommendations, below are banks Reliant has heard of that market towards international missionaries.