I currently take care of a bunch of stray cats and it has gotten expensive. So I set up a ko-fi to get donations and help me out. However, I am now wondering if I will later be taxed for that? I am not a non-profit and seems I couldn't start one even if I tried. But I spend thousands of dollars a year on helping stray cats. So it isn't quite a business ko-fi and more a crowdfunding thing. From what I read crowdfunding is taxable, is it still taxable if I am helping out the street cats? I imagine so but also want some confirmation. My biggest concern is that I will have to claim the money and then it will deduct from my refund at the end of the year. Like the interest I earned from my savings was directly deducted from my final total refund.
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Gifts that you are given are not taxable income. To be a gift (rather than compensation for work performed or good provided) it must be a freewill gift with no expectation of reward, or compensation, or that you will perform any particular gift or service.
However, you must not issue receipts that indicate the gift is a tax-deductible donation to charity. That would constitute its own kind of penalties for fraudulent behavior. A gift made by someone else to you is not tax deductible by them, even if the purpose is charitable. You would have to apply for and receive approval to register as an exempt organization.
You may receive a tax statement for the gift transactions, depending on the dollar amount and the service you use. The tax statement does not mean the income is taxable, but it does mean the IRS will want an explanation of why large sums of money paid to you are not taxable income. There is a procedure to report this kind of income on your tax return for 2022, but I'm not going to explain it now since it seems you are asking about the future and the procedure might change next year. You can ask then.
Keep records of your expenses and the money you receive. Also keep records (copies, screenshots, PDFs) of any postings you use to solicit donations, so you can prove if needed, that you were soliciting free will gifts and not compensation for services or goods.
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