Discussion in 'Site Security & Legal Issues' started by MCA, Aug 31, 2017.
If my forum takes Paypal donations, does the owner have to report that as income?
Yes, its reportable income.
It really depends on your specific situation. The best advice anyone can give you is to go talk to an accountant and explain exactly what your doing, and ask him how to structure things so you can minimize/ avoid taxes.
Depends on the amount of the donation(s). Depends on how much you make from said site. In addition, some states are different.
No, basically none of that is true.
you may be able to make a case that a donation is a gift. And gifts are not taxable. If you give something in return though, such as enhanced access to the site, then its not a gift but they are buying a service, which would be taxable.
As I said, you need to contact an accountant, go though things with him and see what you need to do.
I agree, in general terms all income is declarable and taxable but you may (or may not) be able to offset some or all of it against outgoings and allowances.
If this is the USA....it's likely going to be regarded as a tip for services (whether or not the services are free), and tips are income.
I've taken donations before on a forum, and the advice my accountant gave me --- report all income from a business or hobby activity. That does not mean it's taxable, based on expense deductions (hobby or not). If its a hobby, expenses can only be deducted up to the point of income - if the hobby makes income above and beyond expenses.... it's now a business (subject to the rules concerning how many years in a period are profitable, I believe it's 2 out of 5).
Someone asked me something similar a few days ago. And .... My thought process is ... are the "donations" to a registered charitable organization. If yes - I believe that said donations would not count as actual taxable income. Otherwise (if not a legitimately registered charitable organization) - depending on the state and the actual amount of donations - you may be required to claim "donations" as taxable income. Please don't quote me on any of this LOL. I think the suggestion of contacting an accountant is worthy of respect.
I'm talking about $5, $10 donation amount with a goal of $50 a month. After that is reached, the donations stop. I make nothing off the money. It's all for forum expenses. I also don't use adds or anything to generate income.
Everything that's been said still applies. While you may not actually pay tax it's still declarable under the majority of local tax rules.
agree with others ... it's income it's taxable
don't hide it or assume the gov won't know ... Paypal and similar co are required to report all "payments" to the IRS
there are ways in decreasing your tax but you should talk to an accountant for that
Be sure to record where these donations go if it is server payments then keep a copy of the invoice. Basically if the cost of your site expenses is covered exactly by the donations you wouldn’t owe tax as you’d be working as a loss as you’re not profiting from it though it should still be reported. If you’re not familiar with these things you should seek out information from a accountant.
I ran a gaming clan site and had a donation setup for the game server cost, never reported a cent...guess I'm in big trouble now...maybe I can meet OJ before his release. .....SHhhhhhhh