What it is
Crowdfunding taxes means the way tax rules may apply to money raised through an online campaign. The answer can differ depending on who is raising the money, who gives it, why they give it, and how the money is used.
A campaign for a personal need, a church or community project, a small business, a creative project or a registered nonprofit can each be treated differently. Rewards, perks and equity offerings can add further questions.
Because the facts matter so much, there is no single answer that fits every campaign. This page is educational only and is not legal, tax, accounting or investment advice.
How it’s traditionally been approached
Traditionally, people raising money have kept careful records from day one. That usually means tracking what came in, where it came from, what was spent and what the money was spent on.
Many fundraisers have also separated campaign money from personal money, often through a dedicated account. Many have kept receipts, thank-you records and copies of the campaign page as it was written.
Fundraisers have often asked a tax professional before, during or after a campaign about reporting, forms and whether supporters may be able to deduct their gifts. Some platforms and payment processors also send tax forms or ask for tax information. How they do this is set out in their terms and varies, so read those terms carefully.
How the right fundraising pro may help
The right tax and accounting professional may help you understand how your type of campaign could be treated and what records are worth keeping. A first visit is often a conversation about your goal, who is organizing the campaign, how funds are received and how they will be used.
You might ask what kind of records to keep, whether the funds might be reportable, and how rewards or perks could affect things. You could also ask how to describe the campaign accurately and what to tell supporters about deductibility. A pro may also explain what they can and cannot advise on.
Other fundraising pros can help with the work around the numbers. A donor thank-you and follow-up specialist may help you keep organized supporter records. A rewards design and fulfillment pro may help you plan perks and keep track of what you owe backers. None of this is a promise of any outcome, and you should confirm the details with a qualified tax professional.
The bigger picture
Money questions can weigh on the mind, especially when a campaign was started during a hard season. Knowing you have clear records and a plan may bring some peace of mind and let you focus on the people and purpose behind the campaign.
Taking care of the paperwork is also a way of being a good steward of what others entrusted to you. If stress is building, it is fine to ask for help and to take things one step at a time. Providers.plus may help if you are looking for wellbeing support along the way.
Keep in mind
- Whether campaign funds are taxable or gifts are deductible depends on the facts, so ask a qualified tax professional before you assume anything.
- Be truthful and specific about your campaign, and use the money as you described it. Misusing donations can be fraud.
- Follow the terms of service and payout rules of whatever platform and payment processor you use, and do not try to work around them.
- Equity crowdfunding is a different matter. It follows securities rules such as Regulation Crowdfunding (Reg CF), must go through an SEC-registered funding portal or broker-dealer, and investing is risky and illiquid. Talk to a securities attorney and see the SEC for current rules.
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Start a fundraiser →Frequently asked questions
Do you have to pay taxes on crowdfunding money?
It depends on the facts, so there is no one answer for everyone. Things like who receives the money, why people gave it and how it is used can all matter. A tax professional can look at your situation and tell you how it may apply.
Are crowdfunding donations tax deductible for donors?
Not necessarily. Whether a gift is deductible can depend on factors such as who receives it and the purpose, and many personal campaigns are not set up for donor deductions. Donors and organizers should ask a tax professional rather than assume.
Will I get a tax form for my crowdfunding campaign?
Possibly, but it depends on the platform, the payment processor and your circumstances. Read the terms and payout policies of the service you use. Even if you do not get a form, you may still have records to keep, so ask a tax professional.
What records should I keep for crowdfunding taxes?
It is generally wise to keep records of money received, who gave it, what you spent and what each expense was for. Saving receipts, payout statements and a copy of your campaign page can also help. A tax professional can tell you what is best for your situation.
Do rewards and perks affect crowdfunding taxes?
They can raise additional questions, because giving something in return may change how a contribution is viewed. The details depend on the facts. A tax professional, and possibly a rewards design pro, may help you plan and track perks.
Who can help me with crowdfunding taxes?
A tax and accounting professional who works with fundraisers may be the right place to start. 2A Crowd is an independent directory and not a professional advisor, but it can help you find educational resources and fundraising pros. When you are ready, you can start a fundraiser on 2a.support.
Educational resource. 2A Crowd shares general information and connects people with independent fundraising pros. It is not professional advice. Talk with a qualified professional about your own situation.