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Video instructions and help with filling out and completing When Form 944 Pr Veterans

Instructions and Help about When Form 944 Pr Veterans

Crowdfunding or crowdsourcing of these GoFundMe pages has really exploded in popularity. Anytime you make money, you're going to owe money. Right here's where it gets tricky – while it's an easy way to raise money, you could be setting yourself up for some unexpected tax implications. I've got an example of a Florida couple who raised $50,000 through GoFundMe to help pay medical bills. But by the end of the year, the IRS came knocking, saying they owed $30,000 in taxes on the money they raised. Now, while GoFundMe does have it listed on their website that most donations are considered personal gifts and not subject to income tax, they do warn that every situation is different. They advise you to consult a tax expert. Oh, and let's not forget about the infamous 1099. That's right, GoFundMe will send you a 1099, and the IRS will be looking for that income somewhere on your tax return. Here's the kicker – the annual exclusion for gifts is $14,000. So, if you raise more than that, you could end up paying taxes on the gift. However, there are exceptions. You don't have to pay taxes on gifts to your spouse, gifts to a political organization for its use, or tuition and medical expenses that you pay for someone else. Luckily, in the case of the Florida couple, they had all the necessary receipts to prove that the donations went to medical bills. They even had a letter from their CPA to clear things up with the IRS. So, if you're thinking about using GoFundMe or any other crowdfunding platforms to raise money, be aware of the potential tax implications. It's essential to understand the rules and consult a tax expert if needed.