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What Are the Tax Implications of GoFundMe Campaigns?

When engaging with crowdfunding platforms like GoFundMe, it’s crucial to understand the potential tax implications for both campaign organizers and donors.

For Campaign Organizers

Income Tax: Money raised through GoFundMe is generally considered a personal gift and is not taxable as income. However, if funds are raised for business or investment purposes, they may be taxable.

Reporting Requirements: If you receive more than $20,000 and have over 200 transactions in a year through GoFundMe, the platform will issue a 1099-K form. This form reports the total amount received, which might require explanation on your tax return.

Charitable Donations: If you’re raising funds for a charitable cause, but not through a registered charity, the funds are considered personal gifts, not charitable donations, and are not tax-deductible for the donor.

For Donors

Donation Tax Deduction: Contributions to individual GoFundMe campaigns are generally not tax-deductible as charitable donations. For a donation to be deductible, it must be made to a qualified charitable organization.

Documentation: Keep records of any contributions in case of an IRS inquiry, especially for large donations.

At CPA Consulting Services, we are here to help you understand the specific implications for your situation, as tax laws and interpretations can vary.

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