I need to know if anyone can tell me about how to handle money collected from contributions from forum memberships to a PayPal account, that helps pay for forum cost?

We need some context. Is the forum free but you are a conduit for voluntary contributions to the site?

Best thing so far, is that you're asking "before" you do anything. Kinda hard to give any useful advice or recommendations here without more context.

If I start a PayPal account in my name,

Basically, any tax document issued by PayPal if they are required to issue one, will be issued to you personally, and you will be personally responsible for reporting it. There are ways to "pass it through", but you have to have "something" with an EIN or other tax identification number to pass it through to. You would be better off registering any such account under the name EIN of whatever entity the forum is registered to; be it a business of some type, a 501c3 organization, or whatever it may be.

Thanks for responding. I'll try to explain a little better. Wasn't sure how to ask, exactly. OK, the forum isn't ran as a business or as a for profit entity. Basically it's a online group of people that share a common interest. We share ideas and methods on all types of gardening interests. The online platform we use requires an administrator to run it and provide a credit card to pay monthly charge for server and software usage. So if I serve as administrator and provide a credit card for the billing, I want to setup a way for members to make contributions to help pay for cost of forum. I was thinking I could setup a PayPal account, so people could send contributions to. The question is, if I do that will I need to be concerned that it would be considered income that I need to report on personal tax return. If I do need to be concerned about PayPal account money being reported to IRS, how would I file taxes to show that money isn't income. That it is going towards paying for usage fees for our online group. 

I wanted to add, we use a online platform called Discourse. It's setup for people to start a forum for any purpose that interest them. That's where the payments go, no money will be used as profit or for financial gain of any kind, for myself or anyone else using forum. Nothing is being sold or promoted. Just conversations about our interest. 

I see this on that site. 

Discourse is 100% free, open-source forum software. Forever. Meet the team that builds it.

Being that Discourse is 100% free, I don't see where any monies would be needed for "upkeep and maintenance", or anything else for that matter. Any monies paid would be taxable income to the recipient of those funds. So if you set up a paypal account under your name, that would make any monies deposited into that account, taxable income for you - unless you use it to pay a bonafide tax exempt charge or make a donation to a registered/qualified charitable organization with. But with most charitable donations, only a maximum of 50% of said donation is tax deductible as a SCH A itemized deduction.

They charge for storage space on their servers. So when people post pictures and post information for others to read, the info and pictures most have storage space to be on forum and accessible. 

Having a forum on discourse isn't free. There is a charge for using storage on their servers. I'll will just talk to a tax attorney that may be able to help. Thanks for your responses 👍 

It starts at $50 a month and goes up from there. I'm not sure why they advertise it as free. 

The cost is currently at $400 a month. So if I collect approximately that amount monthly it would be $4800 a year. The thing I need to know is, if that amount is collected and used to pay cost of forum how can I file showing that money isn't a business profit, it is paying for forum cost. No business is being conducted. 

I was looking at IRS website, and saw the section about social clubs. The fees collected for membership are tax exempt, but I'm not sure if this would fall into that category. 

@MarianneK can you take a look at this thread and possibly help out. 

@RyanH5 

@NicolasL 

Hello,  I see your message.   Let me do some research and I will get back to you.   

Thank you @MarianneK I appreciate your efforts. 

Hello, 

In doing some research, I believe your idea would be what the IRS calls a Social Club.   They are tax exempt, if you meet the criteria.  You would file for a 501 (c) (7).  This is different from a charity.  The (7) means social club and any donation to the club is not tax deductible.  

I'm not an attorney, so I cannot provide any expertise on filing for the 501 (c) (7).  You can get the forms on irs.gov along with instructions.   You may also need to file a IRS 990 on a yearly basis, again based on qualifications.   You may want to consult with an attorney for help in setting this up and understanding the filing requirements.  

I also found that if you are officially registered as a Tax Exempt Organization, Discourse gives you a 50% discount.   See the link below, scroll to the bottom under Frequently Asked Questions. 

I hope this answers your question.   

IRS Social Club

Discourse - 50% off Tax Exempt Organizations

I agree with @MarianneK in that the forum would most likely qualify as a 501c7.