GoFundMe is a crowdfunding website that enables people to raise money for a variety of things, such as emergencies, charity organizations, education, and medical costs. Although the website has assisted many people in need, the topic of whether donations to GoFundMe are tax deductible comes up frequently. It depends, is the answer.
The donations may be tax-deductible if the fundraiser benefits a registered charity. However, gifts made for a person or a private cause are not tax deductible. It is important to remember that it is the donor’s obligation to determine if a donation is tax deductible, thus it is a good idea to get professional counsel before giving anything.
A portal called GlobalGiving links donations with screened, regionally focused charities all across the world. The platform charges a 3% processing fee in addition to a 5% fee on each gift to pay its costs of operation. But donors have the choice to pay these costs, so their donation goes entirely to the intended charity.
An organization must apply and meet the requirements of GlobalGiving before being accepted. The requirements include being a legally recognized nonprofit, having a history of productive projects, and being open about finances and effect statistics. Organizations that have been approved can develop programs, generate money, and use a variety of tools and resources to assist them in achieving their objectives.
It is feasible to launch a 501(c)(3) organization on your own, but the procedure can be challenging and time-consuming. Articles of incorporation and bylaws are among the specific papers and data that the Internal Revenue Service (IRS) requires in order to award tax-exempt status. To ensure compliance with IRS rules, it is important to seek professional assistance from an attorney or a tax specialist.
In conclusion, if a GoFundMe fundraising is for a recognized charity, donations may be tax deductible. Organizations must meet certain requirements in order to join GlobalGiving, which charges a 5% fee on all donations. It is feasible to launch a 501(c)(3) organization on your own, but it is recommended to obtain expert assistance to ensure compliance with the IRS rules.