Hi,
I've found some info, but nothing relatively clear on the subject.
I've had a few members ask if they can donate to the site using paypal to help cover the cost and do contests. I know that some of the other sites do it, but I'm a little skeptical and was hoping for some decent information. I always worry when I think about fan fiction and money, so I just want some opinions and such on the matter.
First of all, is it legal to do this? I'm not talking about making money from the site. That's not what this is about for me, not to mention the legality of it, so please don't think that's why I'm asking. I'd like to keep my site ad free (I know, I've been told that's stupid, but it's a personal choice). But a donate option which gives the members the option of contributing to the costs would be nice. I'm just wary of doing it because, again, it's dealing with fan fiction and money.
If we were to receive donations, I would want the money to cover the site costs and then host contests with prizes. If not, then it's fine too. It's not like it costs me that much to run the site yearly anyway, but contests with prizes would be nice. We've hosted a few already but they've come out of mine and one of my admin's pockets. Again, not a big deal but I'd like to do something more than what we did.
For those who have put it up on the site, how did you do it? Did you set it up as a Non-Profit (I'm guessing) and do you report your donations? I'm new to all this, and honestly have no idea how any of this works. I'm sorry if my questions seem elementary, but I'd rather ask stupid questions than do something wrong.
Besides the point, I want to know what everyone's thoughts are on the subject before I add a donate button. I want to be on the up and up and want to do things legally and ethically. Any suggestions, thoughts, comments, etc. would be appreciated.
Thanks
http://www.twiwrite.net
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18+ TwiWrite Fan Fiction Archives.
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The way I have come to understand it is that, and this is USA only, the amount you receive is under $500 for the year it does not have to be reported on taxes. Over that and it becomes income. This is based on a conversation I had related to mturk.com (Amazon Mechanical Turk, automated human data processing.)
I use a mod for the forum to manage site donations along with a secondary mod to allow individual authors to get donations. For simplicity I use Paypal for the payment processing. Google Checkout is another option if you are anti-paypal.
As site owners we put a lot of time into our projects. Time is money, as they say, and that includes your time. There is no reason we should not be able to, at the very least, offset some of the costs associated with our projects. I run a few basic ad systems and have the donation system in place. Overall it helps alot with costs and keeps the site going.
Big ol' can of worms.
To be honest, the copyright/trademark owners are unlikely to go after you unless your site is obviously commercial or they have expressed an issue with fanfiction beforehand. Not having a donation button isn't going to help you any should the legal sharks start circling.
You can't set up as a non-profit (at least here in the US). I am neither a lawyer or a tax expert, but I would claim the donations as 'personal payments' or however your local tax code wants you to claim gifts/personal payments. You will then need to print out and keep the Paypal information. If you make more than a few hundred, I would consult an actual tax professional because the way you need to report it may change and you may require different documentation.
The way I have come to understand it is that, and this is USA only, the amount you receive is under $500 for the year it does not have to be reported on taxes. Over that and it becomes income. This is based on a conversation I had related to mturk.com (Amazon Mechanical Turk, automated human data processing.)
I've been told the opposite. It should be reported, it's just that no one is likely to inquire about it so must people don't.
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I will have to go back and review what I had read. I think it was from Amazon it's self but it was a while back.
In the end the best thing to do, if you really want to be safe, is to consult a tax professional. Alot of times forum reply like this are a mix of speculation and possibly outdated information (Speaking of my post here 😉 )
Thanks! This helps. I have a cousin who's a tax lawyer so maybe that would be the best way to go is just ask her. 😐
I think I feel more comfortable about it. I found an article about just how much ffn makes, and while I'm not totally convinced it's right, I can't imagine having a couple hundred at best donated a year compared to that type of money, being an issue. I just want to make sure I do things correctly.
Thanks for your thoughts.
http://www.twiwrite.net
Where Your Imagination Can Run Free
18+ TwiWrite Fan Fiction Archives.
efiction vs.3.5.2
SQL vs. 5.0.77
PHP vs. 5.2.2
Happily soaking up any and all php, tpl, and html knowledge I can.
I think it's anything less than $500 from a single individual you don't need to get a 1099 for to report it on your taxes. You DO need to claim the income. However, you should offset that income with any of your expenses. So for instance: 400 in donations - 100 webhosting - 25 domain registration = 275 profit. You can also probably claim part of your ISP cost which would most likely take you to the point where you didn't make anything at all.
Same caveat as the others...not a tax attorney or accountant.
