What's the Right Way to Accept Donations?

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?"

Comments

Donations? Store.

[stick_figure_of_doom]

For the record, donations are a rather shotty way to get some cash from your project/comic/free thing. The only way to lure people into opening their wallets is to sell some cheap merchandise with your name on it. I've seen so many Java/Microsoft t-shirts, this could become quite popular.

sole proprietorships, etc

[1eyedhive]

I ran a small S-corportation for two years (well, my dad did, i just did everything). if you incorporate, LLC or DBA then you show up on somebody's radar (IRS, state). the advantage of a DBA ($50 for 5 years here in FLA) is that you can write off a lot as business expenses.
For instance, my dad and i both do a lot of driving (me a on-the-road computer consultant, him a notary), two cars, 75% of all expenses (mileage, maintenance, gas) are written off as business expenses. Ditto for the net connection, web hosting, and a few boxes.

Donations, afaik, if they're small no one will make an issue of it.

I deincorporated when i turned 18 (no need for the 'cover') taxes and fees on cops are outrageous. Stick to a DBA or your own name (taxes come out the same as the DBA = you).

You're planning to take donations for an Open-source project. use your legal name and everything, if it's less than a few k (i think $2000) the IRS won't give a dang, but check with your friendly neighborhood accountant.

Use Paypal, easiest way to do it.