What are the tax implications of crowdfunding for non-profits?

What are the tax implications of crowdfunding for non-profits?

Crowdfunding for non-profits can have various tax implications, including potential tax liabilities on funds raised. It's important to ensure that the funds are used for charitable purposes to maintain tax-exempt status.

Do we need to report the funds raised to the IRS?

Yes, non-profits must report funds raised through crowdfunding to the IRS, typically on Form 990, depending on the amount.

Are there any specific deductions we can claim?

Non-profits can claim deductions for expenses directly related to the crowdfunding campaign, such as marketing costs and platform fees.

What if we exceed our fundraising goal?

If you exceed your fundraising goal, it's crucial to ensure that the additional funds are still used for your charitable mission to avoid tax issues.

Can we use crowdfunding for specific projects?

Absolutely! Crowdfunding can be a great way to fund specific projects, as long as they align with your non-profit's mission.