How do I deal with income from a Kickstarter campaign?

[madeline-bearzi]

I received about $10,000 from a Kickstarter campaign last year for a film I was making. The money went into a separate bank account and I kept a record of every expense the funds were used for. I used all but about $300 of the funds for the film within the year, which I've read can offset the taxes I would have to pay on the funds if I itemize those expenses. Is there any sort of tax form I should be getting from Kickstarter? And how should I be reporting this income and subsequent expenses for the production?

[StacyG]

If you did not receive a 1099-MISC from them then you will put it under "Miscellaneous Income" in Turbo Tax. The product expenses would be reported just like any other business expenses. How they would be claimed would depend on how you are organized. If you are a sole proprietor or single-member LLC then you will complete a Schedule C, otherwise you will be filing a corporate return.

[madeline-bearzi]

Does this hold true even for a film though? I did not "make a product" I was and still am making a movie. The backers didn't "buy" a product from me and aren't receiving anything tangible in exchange for their pledges. I'm not a business, I'm an artist. Would this make the pledges gifts?

[StacyG]

There are three tax possibilities when it comes to crowd-funding money. The cash could be viewed as a gift, an investment, or a business transaction. You have to decide which pertains to your situation. This is a new and evolving tax situation, to be completely covered, you can ask the IRS for guidance.

It sounds like your situation would be a gift, as long as the giver(s) do not expect a reward. Gifts received from an individual are not reported on a tax return, regardless of the amount received.

[treavioli]

Is it possible that you could have multiple situations, whereas certain backers only donated but didn't "buy" anything and there were some that did?