Saturday, March 01, 2014

Kickstarter and Taxes: A guide for your accountant.

In general, in the US, funds raised on Kickstarter are considered income.

In general, a creator can offset the income from their Kickstarter project with deductible expenses that are related to the project and accounted for in the same tax year. For example, if a creator receives $1,000 in funding and spends $1,000 on their project in the same tax year, then their expenses could fully offset their Kickstarter funding for federal income tax purposes. If a creator receives funding in one year and spends money on their project in a later year, consider whether their expenses can still offset their Kickstarter funding using the accrual method of accounting.

More from Kickstarter.

From one Kickstarter alum: "Approximately 33% of the funding goal goes to pay the state and federal taxes that will be levied against the money raised. American tax law doesn't count up-front production costs as an immediately deductible business expense, so at first I'll have to pay taxes on nearly all of it as if it were pure income." Again, the accrual method may mitigate this.

1 comment:

Rim Sanson said...

In Kickstarter One can reach the capital amount easily, the only requirement is creativity and Interest. They should transparent to gain the hope of the shareholder. Hupictz benzel