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CelticSir

People who donate with paypal ?

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Please move this if this is the incorrect place to post such a question , I was unsure as to where it was to be posted. My apologies in advance if I have this wrong. My website is to have donate page, the game is free but people are welcome to donate to keep the site alive. As many games do. Now I am planning to do this via pay pal as it is pretty secure. But I have a few questions about it: 1) Have you ever done this for a website for yourself? If so, did you just use a personal account? Premium or business? 2) Which account type is best for me, in respect the game is free, so im not selling a product, how ever donators do get a little advantage over the non donators.. would this class my website as a "business", thus meaning I have to have a business pay pal account or can a non business do sufficiently? I'm mostly asking this as I am sure alot of you have probably set up such a thing for a website or game so, just looking for advice here ! Hope you can help! :)

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From an entirely U.S. point of view, when you solicit donations and your organization is not a tax-exempt charity, you must clearly state that donations are not tax-deductible. You must also report donations as income, since these donations are taxable gifts a la gratuity.

Donations, also called charitable contributions, are gifts provided without consideration (i.e, return, or an expectation of return.) In the U.S., if you failed to adhere to these requirements, your organization would run afoul of tax law, be liable for fraud, and become an excellent target for IRS auditors.

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Yes it is the same here in the Uk, how ever paypal charge a fee per transaction which I had assumed was a "tax". Though I am not expert with internet transactions as I have never done it before, so it is highly confusing wich one is legally the correct one to use.

Although i would also be confused on how taxing works, as in my country you are taxed over a certain amount of earning, when it comes to donations there is no way to know how much money I will receive, and so wouldn't I end up being taxed even if i earned a mere $4 for the entire year ?

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Quote:
Original post by thefollower
Yes it is the same here in the Uk, how ever paypal charge a fee per transaction which I had assumed was a "tax". Though I am not expert with internet transactions as I have never done it before, so it is highly confusing wich one is legally the correct one to use.


No, that is paypal's fee for doing all the processing for you and unrelated to any tax which has to be declared.

Quote:

Although i would also be confused on how taxing works, as in my country you are taxed over a certain amount of earning, when it comes to donations there is no way to know how much money I will receive, and so wouldn't I end up being taxed even if i earned a mere $4 for the entire year ?


Effectively this puts you in the same area as a business in that at the end of the financial year you must declare your income and will be asked to pay tax accordingly.

For more details I'd contact the tax office, they will be more than happy to help you out.

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