GoFundMe accounts

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denmarc

denmarc

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Heard on the radio that these accounts are taxable by the IRS and held accountable to the recipient of the funds.  Upon some research and what little I know about the tax code, I find that unless the money received exceeds $20K and/or over 200 donations, no 1099 is filed by GoFundMe. Am I correct?

Reason I ask is a friend of ours husband was killed in MO over the weekend in a car accident. An account was started to help with funeral expenses.
 
They are *probably* considered gifts and hence nontaxable, so long as the amount from any one person is below a certain amount. But your friend should talk to a local tax advisor as there could be state tax consequences. And even if a 1099 isn?t issued, that doesn?t mean funds received are nontaxable.
 
I have also heard that Go fund me funds are taxable. But I don't know about the tax code either.

We had a family member that lost a son. We as a family paid the funeral home directly. This avoided any tax issues and eased the burden of losing one.

FYI the funeral home was happy to accept our payments without informing the parents of our intent. Once the account was settled they informed the parents that everything had been Paid in full.

 
Memtb said:
  I support capitalism as much as anyone.... but approximately 8% of donations go to GoFundMe!
Click to expand...

Correct. Their cut; plus card processing fees. But who is responsible for any taxes? The "host" of the account (if you will) or the recipient of the funds?
 
I'm sorry to hear of your friend as well.

I too recommend that you call a local tax guy.  If she needs to set some back for taxes, best to know up front.
 
Oldgator73 said:
Did an Internet search and found this article.

https://www.dontmesswithtaxes.com/2015/04/cancer-survivor-gets-19000-tax-bill-for-gofundme-donations.html
Click to expand...

I heard about the same.
I did a little more research and it appears that GoFundMe is required to file a 1099 if a particular fund exceeds $20K or over 200 donations.

I told the DW if I kick the bucket before her, throw me out in the back 40 in our woods! Funeral expenses are through the roof now!
No way will I pass on that burden.

Back to task at hand...
If info I read is accurate, they should be ok.
And thanks to those who gave well wishes. I will pass them on to him. 
 
The funds are potentially taxable to the recipient. Whether any specific donation amount is actually taxed usually depends on a variety of factors and covered by various IRS rules.  I don't think there is any single, simple answer.

That said, gifts up to $15k are generally NOT actually taxed, but sometimes a gift tax return must be filed anyway. I haven't kept up on the 2018 changes as far as gifts and charitable donations, so don't take this as advice. Donations, though, are monies that to go to not-for-profit entities and individuals are not considered to be non-profits. Somebody could get set one up, though, and have it receive the GoFundMe monies and then use it to pay somebody's medical or funeral bills. That probably makes it a charity. The charity may have to file a tax return, but probably nothing gets taxed. If any substantial amount of money is expected to be collected, that's what I would do. If the amounts are small, e.g. a few hundred dollars, it's probably below the radar no matter what.
 
Forget about the 1099. That?s a burden on the payer to issue. Not getting one for funds received doesn?t mean the funds aren?t taxable, it just means the payer is not required to file a 1099. The funds may still be taxable to the recipient, or they may not. There?s a great deal involved.
 
Memtb said:
  I support capitalism as much as anyone.... but approximately 8% of donations go to GoFundMe!
Click to expand...
For the most part, I consider their fee reasonable. Where else can you get to coverage and ease of donation? Now, if the only donors one expects are close friends and relatives, simply acting as the "executor", then save the 8% and do it yourself. But, when I initiated a GoFundMe account for my brother after he lost his son, our friends and family had friends and family that viewed the request and some outside our immediate circle donated. If not for GoFundMe, I doubt I could have raised as much as I did for him.



As for taxes, I don't know if he reported it or not.
 
Too much grey area. No wonder the IRS tax code is almost 74,000 pages thick!  ???

Another thing I wondered about is if some generous soul decides they want to help somebody out and stumbles across one that interests them, how do they know that the recipient is honest and worthy of the money? Maybe they are just trying to support a drug habit, buy a new car, whatever.
How does one know before donating? 
 
I rarely give cash unless I know the person.
Examples of ways that I have helped others;

I bought my wife a new clothes dryer...So we could give the old dryer to the neighbors. (Nothing wrong with the dryer. But theirs was shot. And they had new born twins and no money)

Went to Walmart and bought groceries and delivered them to the home.

I've lost count of the number of coats that I've given away. I just pretend they don't fit anymore.

You can always pay for utility bills if the utility company will allow.

How does one know before donating?

You don't....You try to help and hope for the best

 
Gizmo100 said:
You don't....You try to help and hope for the best
Click to expand...

Been there, done that.

Was on my way out of the grocery store on my way home. While waiting at a stop light to make a turn, gentleman standing on the corner with a sign. I've lived in this neighborhood almost 30 years and have never seen such a thing in this area. Hand written sign said he lost his job 2 months prior and needs help.
Due to the fact that was not normal for the area, I turned around and inquired.
Gave him almost all the meat I bought on sale from the grocery store. Along with a couple other things.
He was holding back tears as I shook his hand.

It's true. You really don't ever know. 
 
denmarc said:
Been there, done that.

Was on my way out of the grocery store on my way home. While waiting at a stop light to make a turn, gentleman standing on the corner with a sign. I've lived in this neighborhood almost 30 years and have never seen such a thing in this area. Hand written sign said he lost his job 2 months prior and needs help.
Due to the fact that was not normal for the area, I turned around and inquired.
Gave him almost all the meat I bought on sale from the grocery store. Along with a couple other things.
He was holding back tears as I shook his hand.

It's true. You really don't ever know.
Click to expand...

And that's how you do it :)) :))
 
My wife noticed a guy on the street with a sign that said, "Need money for food".  She was going through the drive-through at a burger place anyway, so she doubled her order.  Drove up to the guy and offered him the bag with a burger and fries.  Guy said, "no thanks, I'm a vegetarian."

I'd figure if a person was hungry enough, it wouldn't matter.  Maybe I don't understand vegetarianism?

She bought a couple of burgers just the other day for one of the "homeless" people lurking outside the McDonald's here in Quartzsite.  He had no trouble eating it, and he did share with his dog.

Food?  yes, money?  Uh, no. 
 
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