Server finances

[Zanniej]

Hi all,

For transparency sake, I'm having a lot of issues with Paypal lately. The only way to accept donations is by creating a business account. Since the US is now cracking down on tax evasion, they want me to fill in a form of our non-profit organisation... Which I'm not... I'm a person, not an organisation (I am non-profit though).

I'm looking into my options, and it looks like the options are the following:

1. Become an actual non-profit for the law. This can be done in two ways:
   1. Start an association. This means that we'll need members, officially. Also a lot of added administration. Members are the biggest challenge in this regard, I think.
   2. A private coorporation. Means I can just jot my own name down. However, this'll cost a lot of money just to set up. (1000 - 2000 dollar or so)
2. Become a bussiness... For that, I'd probably use my existing business to save hassle. Does cost more tax.
3. Move away from PayPal? Or whatever suggestions you might have?

Long story short, they want to know what money comes in, and goes out. That's of course no problem, as everything is handled through Paypal. But someone has to pay the taxes for it, or get exemption.

I'm still looking into how to solve this, as we unfortunately can't continue as we are doing now. I'll of course ensure that the bills get paid while our account is frozen

[jclay65]

What about a GoFundMe type of account?

[DaloLorn]

Legally, I'm not sure #2 wouldn't risk possible troubles with WotC or someone. #1a could put all the devs/DMs down as members, I suppose...

[Rhifox]

What about a GoFundMe type of account?

Or Patreon, perhaps.

[DaloLorn]

Rhifox wrote:
> [quote=jclay65 post_id=926322 time=1631786809 user_id=2491]
> What about a GoFundMe type of account?
> [/quote]
>
> Or Patreon, perhaps.

Patreon still needs to be paid out somewhere, such as PayPal. Not sure it'll help much.

[Zanniej]

It would allow me to create a personal paypal account, instead of a bussiness one.
Though it would give more costs involved.

[Xorena]

I am sure someone on this forum is a lawyer and understands these things. I am not, nor an accountant. I do know enough that you pay taxes on anything considered income.

[ValerieJean]

What about using Google Pay or something similar?

[MrSmith]

What about a GoFundMe type of account?

Great idea.

This would allow you all to conduct periodic fundraisers, say quarterly... If done correctly (read: highlighting server upgrades and content improvements), this would likely bring greater visibility to BGTSCC and increase players on the server.

For example... https://www.gofundme.com/f/save-the-role-play-haven


Cheers!

[Steve]

The problem always remains whether Zan reports the money collected through Paypal as earned income, or not (it could be considered earned income, since one person is giving him money for a service, which is access to his Server), and then for tax purposes, Z would have to list BGTSCC as a yuuuuuuge expense (actually the real expense that it is).

As long as the "profit" gained is less than the expense, it is a loss. This is much easier to do if you file as an Independent Contractor. But even someone with a wage can also have a on-the-side earned income.

Yes, the "donations" will be taxed as income, which I can imagine is only a problem if the monies Zan acquires puts him in another tax bracket. That wouldn't be good, for Zan.

Even though people "donate" to BGTSCC, what is happening in this transaction is legally not donating, since BGTSCC isn't a non-profit (and what a person does donate cannot be deducted from personal taxes as such).

There is also the Venmo payment service. There is also just having a bank account, like a Wise (previously Trasnferwise) account that can accept both Euro/dollar/etc. currencies. That account could directly pay off the costs of the Server.

Lastly, the Server essentially functions as a hobby. Hobbies can be considered alternative forms of income (taxed), but like I wrote above, the final amount earned/spent on the hobby at the end of each year will actually determine who much tax or taxes the hobbyist must pay.

[MrSmith]

Yes, the "donations" will be taxed as income...

In the U.S., generally, donations made to GoFundMe campaigns are considered personal gifts, and as such, are not taxed as income. source: https://www.pgco.com/do-i-owe-taxes-if- ... -campaign/

I opine the nuance here is this... Did the person who donated money receive something in exchange? The answer is a qualified no. Why? Access to the server is provided whether someone donates money or not. Therefore, donating to the server does not provide "a player" anything of qualified value in exchange for this gift.

The reason I assert the answer is a qualified no is that someone who donates money to the server as a personal gift does receive an intrinsic value in exchange for doing so.. vs. an extrinsic value.

Intrinsic value is neither income nor taxable. It's simply the great feeling you get for doing the right thing.

Cheers!

[Steve]

My reference to income was if Zan would declare the hosting of the server as expenses, as a independent contractor. Which was related to his Point #3 in the OP.

In the U.S., generally, donations made to GoFundMe campaigns are considered personal gifts, and as such, are not taxed as income. source: https://www.pgco.com/do-i-owe-taxes-if- ... -campaign/

This is interesting to note...when and if the Server turns to funding via GoFundMe. The issue though, at the moment, is the current situation, being Paypal "donations." Is the base problem then is how Paypal is referencing these donations, as donations? And then, NOT as gifts? I just tried to "gift" BGTSCC's Paypal account to see how or if it was requesting a Type of money transfer—donation, gift, payment of services, etc.—but it's currently locked out.

In reading your link, it does state that crowdfunding sites will issue a 1099-K if the amount transferred is over $20k and more than 200 transactions. I would guess that BGTSCC wouldn't go over this amount.

Perhaps the solution is to create a new Paypal account? In my own experience utilizing Paypal for both personal and business related funds—and gofundme funds—Paypal is notoriously difficult to deal with.

[Aspect of Sorrow]

https://play.google.com/store/apps/deta ... n_US&gl=US

[Valefort]

How many members would be needed for an association ?

[MrSmith]

https://play.google.com/store/apps/deta ... n_US&gl=US

Because BGSTCC's player base is global, a large portion of the server donations will constitute an international financial transaction. Therefore, any solution must take into account legal concerns that extend beyond the mechanisms for remuneration.

How many members would be needed for an association ?

In the U.S., at least two persons must date and sign the articles of association, showing its creation.

Cheers!