Money makes the world go round, even when it comes from small donations that add up to big numbers.
In the effort to reach your goal, you’ve gotten on the crowdfunding bandwagon.
This is a method of soliciting contributions from vast amounts of people to raise the money you need through various websites, whether it’s for anything such as your business, yourself, or even a medical cost, and more.
No matter which website you have grown your funds through, if the amount distributed meets certain reporting thresholds, there may be a requirement to report distributions of money raised by filing Form 1099-K.
This form, Payment Card and Third Party Network Transactions, may need to be filed with the I-R-S.
Tax attorney Mary King of the Law Office of Mary E King PL wants you to know:
“The American Rescue Plan Act clarifies that the crowdfunding website or its payment processor is not required to file Form 1099-K with the IRS or furnish it to the person to whom the distributions are made if the contributors to the crowdfunding campaign do not receive goods or services for their contributions.”
She continues to say that prior to 2022, the threshold for a crowdfunding website or payment processor to file and furnish a Form 1099-K was met if, during a calendar year, the total of all payments distributed to a person exceeded $20,000 in gross payments resulting from more than 200 transactions or donations.
If you have raised money through any crowdfunding platform, it is best to have a tax expert on your side. The Law Offices of Mary King have been dealing with the IRS for decades and there isn’t any tax problem they haven’t seen.
Give Mary King a call and she will be there for you.