Forbes | Kickstarter's Sting In The Tail: Tax | Just Tell Us about |

More people need to realize that Kickstarter money is business casflow, not profit or earnings.

Money raised from crowdfunding isn’t a tax-free windfall. It’s not like winning the lottery. It’s income, just like any other sales income, and that means that project owners could face some sort of tax liability, especially for wildly successful projects.

Raising money from other people quickly propels a young venture into the traditional world of corporate rules, bookkeeping requirements, tax bills and legal questions. “It’s a business. Look, you’ve started a new business enterprise.”

A start-up sending “rewards’’ such as T-shirts to contributors can look very much like a traditional business selling goods or services. The Kickstarter revenue, minus expenses, could be taxable profit.

What you absolutely cannot do is treat crowdfunded money as some sort of magic bonanza that is exempt from normal business rules. It’s not. Whether you realise it or not, your Kickstarter project is actually a Kickstarter-funded business and you need to work business expenses, including your accountant’s fees, into your financial plans.


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Via RPattinson-Daily