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Can we Pay the Expenses For A Guest Speaker/Muscian and These Not be Reported as Taxable Income? Should we Reimburse the Speaker or Pay for the Expenses Directly?

In order for expense payments to not be considered taxable income, the expenses must be substantiated by the guest speaker/musician.  An expense report, with receipts, should be submitted for payment.  Alternatively, the hotel, airline, etc. could be paid directly by the church.  However, as long as the expenses are itemized, the reimbursement can be made to the guest speaker/musician and will not be taxable.  The honorarium, however, will be taxable.

Sometimes travel “allowances” are given, and in these cases, an itemization of expenses is not provided. A travel “allowance” would then be considered taxable income as well as the honorarium itself.

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