However, it's always best to confirm if there is any doubt or question. Usually, recipients won't need to pay taxes on the donations because of IRS rules that stipulate an annual $15,000 exclusion. When this happens it's always best to meet with an accountant. For instance, a T-shirt, free lunch, etc. Sometimes, the organizer of the crowdfunding campaign may offer gifts in kind from the injured person's business in exchange for a donation. However, you may still need to file a Form 1099-K, often provided by crowdfunding sites such as GoFundMe or Paypal when more than $20,000 is donated, or if more than 200 people donated. For tax purposes, the IRS considers this donation as a gift and does not consider this taxable income. Most GoFundMe's are intended to pay for medical expenses, living expenses, children's college expenses, etc.

Did supporters receive goods/services in exchange for a donation? If you have received proceeds from a GoFundMe, consider the following:Ģ. This is where things can get a little more complicated.

Taxability may depend on how the funds were used, and whether anything was provided in exchange for the donations. The good news is that the IRS does not consider proceeds from fundraising campaigns to be a taxable source of income.īut.that's not all. And, while this can bring welcome relief, most recipients wonder whether the income is taxable, and how it needs to be accounted for come April. Many times, family and friends eager to help will set up GoFundMe accounts or other donation pages to collect funds to alleviate the financial burden on you and your family. Medical bills add up quickly following a personal injury accident. Will the Taxman Cometh Following a GoFundMe for Medical Bills?

Setting up gofundme