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Kicktaxing: The Crazy Complexity of Paying Tax Correctly On Crowdfunding
eggboard writes "I thought I knew what I was doing when I budgeted for a Kickstarter campaign. I spent weeks sorting out details, set a number ($48,000) that included expenses, Kickstarter fees, and a margin of error. In the end, we raised over $56,000. But my tax planning nearly put a crimp in cash flow, and could have been real problem. It all worked out, but I've written a detailed guide for people for before and after a campaign to avoid my mistakes."
It's difficult to claim "clickbait" when there are no ads!
I wrote the article in this link, and edit a publication called The Magazine. Medium pays us to write new content and post archived material from our publication to their site while they learn about what people read. They're looking at a lot of data (which anyone who uses the site, even as a blog platform, can see in the stats page) to figure out whether people read entire articles, etc.
I wrote 4,000 words from months of dealing with tax and business issues related to Kickstarter. I didn't realize that would be considered *thrilling clickbait headlines*. Instead, I though Slashdot readers, among others, would be a likely audience working in and around crowdfunding, and might like to get some information before launching one about the tax and accounting side of things.
The "multiuser blog" is a collection of related articles, some of them run by publications like mine.
Freelance tech journalist for the Economist, MIT Technology Review, Macworld, and others
Who do you think is responsible for setting tax policy and spending tax revenues? Hint- it's not Obama. Did you sleep through 9th grade Social Studies? Or have you not gotten to 9th grade yet?
Isn't it a weird coincidence that the Dow Jones Industrial Average has doubled since "anti-business" Obama took office?
Memorandum to the guy who wrote the original story:
Almost everyone on Slashdot in 2014 is a raging, gangrene-infected, pus-spewing asshole. I don't think there's ever been a more sour, mouth-running bunch of twaddle-shoveling fucks in the same place in human history.
You posted a good article with some good information for reasonable people who are doing something productive. The people here are only interested in their bong, porn, Xbox and wandering through their mom's kitchen occasionally to grab a handful of potato salad and wipe their ass on the dishtowel.
Keep writing. The people around here would shit on an orphan's birthday cake.
WTF - you know, every other small business person thinks of this shit BEFORE they start. It's not hard, really. Quit pretending you're running a lemonade stand in your parents driveway.
Bullshit.
A lot of the folks running Kickstarters have "business plans" that amount to "distribute sweaters to homeless kittens". Should they realize that has tax implications? Well, perhaps, insofar as you can't fart without the IRS taking a sniff. But to blame people who seriously have a business plan of clothing cats, for not understanding cash-vs-accrual accounting? Seriously, go fuck yourself with your framed MBA, dude.
We wonder what has gone "wrong" with this country? TFA gives a pretty damned good example. Have a good idea? Have adequate funding? Ready to ship and create one of those new Small Businesses the talking heads always praise? Oops, FOAD friend! You forgot about your quarterly withholding on money that no sane entity would consider anything but a production expense - Silly bear, considering our government "sane"! What will you think of next?
For anyone seriously wanting to know the "right" answer to this issue - Move to one of America's few remaining unorganized territories (Maine, Florida, and Alaska have a ton of them); that relieves of you 99% of the "bullshit" burden, which rests solely with your most local taxing authority (the city/town/county), and reduces your nightmare to just the state and federal levels. Most states just want a cut of your AGI, so if you have no profit, nothing to report. The feds just want a schedule C and SE, and couldn't care less how else you officially organize your activities.
Now, if you happen to live in a hellhole like NYC where everyone from the city through your Block Captain to your Landlord to your old roommate from 1976 get to fuck you with taxes - Move, or abandon your dream. Seriously.
He got into these problems with revenue matching because he is running his business on cash basis accounting. In general only very small businesses can be run on cash basis accounting almost all manufacturing oriented businesses use accrual accounting. With accrual accounting you would book the Kickstarter money as a customer deposit and then recognize it as income when the product ships.
http://www.investopedia.com/te...