KickstarterForum.org

What has to be set up before you start collecting funds? Do you have to have say an account to handle the money or can you hire one if and when you reach your goal? Should you set up a seperate bank account for the project or can you use your own (and what is the risk of having the funding treated as personal income?). Do you need an itemized budget?

I've launched one successful Kickstarter all the way through and I'm no expert as far as financials are concerned, so perhaps someone more experienced than I can confirm my points, but if you're planning on ultimately starting a business out of your Kickstarter, I'd recommend front loading some of the paperwork pieces.

You can get away with nothing but an Amazon Payments account linked to Kickstarter (afaik that's still current.. but if you start creating your project on Kickstarter, it'll tell you what you need to set up). However, as convenient as it sounds to just get started, it can be a bit of a headache to juggle later on in the process without a bank account and possibly incorporation.

You can wait until after you have a better idea of whether or not you're going to be successful in your funding, but it may be a good idea to have a bank chosen and have called them to inquire about the kind of account you might want to use. For a true business account, they may need an EIN number which you will have to actually incorporate to get. The additional benefit of incorporation is that it gives you a bit of a personal liability shield in certain cases which may or may not be useful for your project.

If your funding goal is small and you aren't really planning on turning it into a company down the line, it should be perfectly reasonable to just create a new personal account at your existing bank to drop the money into as your Kickstarter draws to a close.

I'd additionally recommend getting yourself a separate credit card that you can use for project-related purchases if for no other reason than to automatically have a list of what expenditures are associated with your project and which are personal expenditures.

Regarding taxes.. I think that Kickstarter ends up being somewhat of a grey area.. If you raise a lot of money, you should definitely get some tax advisement from someone who knows it better.. but for most small projects on Kickstarter.. I get the feeling that the defacto is to sorta slide underneath the radar. (This is mostly hearsay that I've picked up while doing some research for my own project.. I urge you to confirm this with your own research)

Choosing to hire a CPA (certified public accountant) to work on your financials is a personal decision based on the complexity of your situation. But you should definitely do whatever you can to ensure you have complete visibility and control over your finances where possible.

Whether or not the funds raised through Kickstarter will be treated as taxable income may come down to state or local tax laws, which can vary widely. So don't make any assumptions! It's always best to consult a professional and be sure instead of finding out later on that you've created a burden or headache for yourself.

What would you consider a small project Julian?

Oof, hard to say.. My last project, Reflowster made around $15k (over it's $10k goal).

I'm really just shooting from the hip.. but I'd say that if you were aiming for more than $20k-$50k that you should start looking into covering your butt on the taxes. I think Amplex had good advice to see if you could get in touch with a CPA. You could probably request like a 30 minute meeting with a CPA to pick their brain and not end up spending too much on it.