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What's the Right Way to Accept Donations?

Posted by Cliff on from the a-difficult-issue-for-any-open-source-project dept.

Schapht asks: "Not long ago, SourceForge.net started offering users and projects the ability to accept donations. But there doesn't seem to be much information on the legal implications of accepting donations. Should open source projects start registering themselves as businesses? Would there be fines if they didn't? Are there any options for a project that can't afford the processing fees involved in registering a business?"

1 of 46 comments (clear)

  1. Hobbies by natmsincome.com · · Score: 3, Insightful

    Most open source projects would be classed as hobbies (In Australia any way) Until your earning about $5,000 to $10,000 it's treated as a hobie. That means your supposed to declare it as income and you don't get and tax breaks. If your getting more than that a year I'm inpressed.

    Once you start making more than that you need to creat a company get a business number etc. BUT you can now claim more expences and tax deductions.

    So if your getting say $10 to $1000 a month from donations. Your supposed to declare it as income. If you don't you may be liable for back taxes but that's about it. If your getting more than that it's worth creating a company for the tax breaks. Computer, Internet and Software are paid for by the company (expense) and your paid from the company.

    Basically I'd try to treat it like a small business but if your getting less than $500 a month it's still just a hobie.