Unfortunately, unless you are claiming the Kickstarter funds as business income, there is no way to deduct the expenses from the income. Yes. The income is taxable. Kickstarter funds are typically used as startup business funds. Your scenario is unique.
What was received in return for the donation? You mention it in the thread above. If donors did not receive a good or service in return, then you could classify as a gift.
Be sure to enter this as Other Income so that it is not subject to self-employment taxes.
To enter this in TurboTax Online, follow the following steps:
- Under Federal, click on Wages & Income
- Expand the options in Less Common Income, and click Start/Revisit next to Miscellaneous Income
- Next to Other reportable income, click Start/Revisit
- Answer Yes to the question Any Other Taxable Income
- Enter a description and the corresponding dollar amount and click Continue
- Click Done
You will find this income reported on line 8 of Schedule 1 and carried over onto the 1040 on line 7a. This gets added to all other income on your return and taxed at the ordinary income rate for your filing status and income level.
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