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Level 3

How to file so that funds received for a fundraiser is not taxed

My SIL was severely injured in an accident. There were 2 fundraisers done to raise money for his medical expenses. He should be receiving 1099’s because the funds were withdrawn from Gofundme and PayPal accounts. Where do you enter that they were gifts received (all smaller amounts) so that they are not considered part of his income?

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Employee Tax Expert

How to file so that funds received for a fundraiser is not taxed

First, please enter form 1099-MISC as is and follow the interview questions. Most likely, box 3 of the form will be filled out. TurboTax will ask you to describe the reason for the form, you can indicate the fundraising reasons there. Then, you would go to:

  1. Wages & Income
  2. Less Common Income
  3. Miscellaneous Income
  4. Other Reportable income -  enter your description and the 1099-misc amount as a negative number. 

 

You will see that you will have two same figures on Schedule 1, line 21 : one as positive number (that's your 1099-Misc) and 2nd as a negative number, making the income nontaxable, but still reported on your tax return. 

 

How to look up Schedule 1?

If you are working on line:

  1. Select TaxTools
  2. Select Tools
  3. Select View Tax Summary
  4. Select Preview my 1040 (on the left), scroll down to Schedule 1

 

If you have cd/download: go to Forms (upper right corner) and find 1040 Wks, scroll down to Schedule 1, OR find Schedule 1 and click on it directly