KickstarterForum.org

Hi all,

Relatively new to the forum, but quickly learning the ropes! What a great resource for people!

Anyway, I have one successful KS campaign under my belt (a $5K web-series) and am taking on a film with a signficantly larger budget of $50K that we're trying to raise. This is not my film, it is a colleague's, they just hired me to run their KS campaign because of the success of my first one.

My question is this: I know KS has some funky rules on how it considers its contributions as income. I've set up this $50K film campaign under my own KS account, but should I have this set up under my colleagues who are actually producing the film instead?

Would I have to report the $50K as income to the IRS? Is it considered taxable income if all the expenses go towards the production of the film?

Clarity would be GREATLY appreciated by anyone! Thank you!

Hi,

I am no expert but I think it all depends on how you disburse the money.

Say you have a successful campaign and raise $50,000, that would count as your income - you would then need an invoice from your colleagues for the total amount - minus your fee (presumably you are taking a fee) say $45.000.

Your taxable income would therefore be $50.000 - $45.000 = $5.000, which you would have to declare.

Cheers,

Andy

The tax hit on $5K would certainly be easier to bear than a tax hit on $50K... that'd be nice if that's the case.

Right now, we're considering switching mostly because of that reason, but if I don't have to shoulder the massive $50K tax hit, then I think we'd stay set up as is.

It's my understanding that the tax laws on crowdfunding campaigns are still really fuzzy because it's such a unique way of raising funds. I would say your best bet is to ask an accountant.

Congrats on the web-series!

Matt

Thanks Matt!

And yeah, I'll probably need to ask someone about this. Le sigh.

I feel the pain. I've been making some educated guesses about intellectual property because I don't know any lawyers in the field and don't want to pay for one yet.
I'll let you know how that backfires.

Matt

Project coming soon.
http://prismland.com/

For once, I'm glad I'm not likely to raise any more than the minimum 4K goal. Which wouldn't be too big a hit on my already small income. A larger amount and, well, I'm bringing in the family accountant for sure.

We decided to opt for hosting the account under the production company's LLC as opposed to my personal account, since they can take the tax hit on $50K, and so I'm only taxed on my cut. Feel much safer about that. I recommend for anyone raising more than $5-10K they do the same.

Here's a couple of articles worth reading regarding Federal Taxes.

http://www.bankrate.com/financing/taxes ... tax-costs/

Amazon 1099 form:
http://www.amazon.com/gp/help/customer/ ... =200663310

Has anyone addressed who pays State Taxes?

I wrote a long blog post on taxes that might be helpful. See: http://www.crowdcrux.com/kickstarter-in ... lications/

Basically, I found that you first need to classify the pledges into two types: donations and purchases of the product.

For the tiers where the backers are essentially buying swag or the product, you would then calculate your expenses and subtract them to get your taxable income.

Sales tax may apply if you meet the IRS requirements.

“The current default rule throughout the United States is that you must collect sales tax on Internet sales to customers in those states where your business has a ‘physical presence.’

I'm not an accountant or a lawyer, so I would highly recommend consulting both of them to be 100% certain. My articles/tips don't constitute legal or tax advice.