Sarah Heath - Edmond Life & Leisure
Mar 7, 2023
GoFundMe has become the largest crowdfunding platform that exists. With the rise of contributions to GoFundMe campaigns, many taxpayers have questions about the deductibility of such donations.
GoFundMe has become the largest crowdfunding platform that exists. Crowdfunding allows projects to be funded through contributions from the public. There are two types of donations you can make on GoFundMe- donations to a personal fundraiser, such as for medical bills or funeral expenses for an individual, and donations to a charity fundraiser such as churches, animal welfare agencies and educational organizations. With the rise of contributions to GoFundMe campaigns, many taxpayers have questions about the deductibility of such donations.
Are donations to GoFundMe tax deductible?
Yes, but only donations made to a GoFundMe charity fundraiser. Donations made to a personal fundraiser are not tax deductible. To be sure that you are donating to a charity fundraiser, verify who is organizing the fundraiser and where the funds are going. If the funds are going to a charitable organization, look for a green check mark next to the organization’s name. It will also be noted that the organization is a registered nonprofit and that donations are typically 100% tax deductible.
Will I receive a tax document from GoFundMe?
If the donation is made to a charity fundraiser, you will receive a tax receipt from GoFundMe’s charity partner, PayPal Giving Fund. If you donated to a personal fundraiser, you would not receive a tax receipt as this donation is not deductible. If you do receive a tax document, it is good practice to keep it for your personal records. Your tax preparer will likely ask for this documentation when it comes time to file your annual tax return.
How does this affect my tax return?
For tax years 2020 and 2021, taxpayers utilizing the standard deduction were eligible to receive a $300 deduction on their tax returns for charitable contributions. However, this is not the case for 2022 and no $300 deduction is available when utilizing the standard deduction. You may still deduct charitable contributions of up to 60% of your adjusted gross income (AGI), as an itemized deduction on Schedule A of your tax return. AGI can be found on page 1, line 11 of the 2022 Form 1040. However, taxpayers often will only use itemized deductions if it exceeds their standard deduction for 2022- $25,900 for married filing jointly, $19,400 for head of household and $12,950 for single taxpayers. The average taxpayer utilizes the standard deduction.
What are some examples of charitable organizations where my donation is deductible?
Some examples include United Way, American Red Cross, the Alzheimer’s Association, the Girl Scouts and Boy Scouts. Donations to local charities like the Homeless Alliance, Oklahoma Humane Society, the Regional Food Bank and Oklahoma Arts Institute are also deductible. These are just a few of the many charities that qualify as deductible charitable contributions. You can search for an organization’s eligibility to receive tax-deductible charitable donations on the IRS website at apps.irs.gov/app/eos.
Sarah Heath is a tax associate at Arledge, the largest locally owned accounting firm in the Oklahoma City metropolitan area. Arledge is a recognized leader in the accounting industry offering practical solutions in the areas of tax planning, auditing, consulting, accounting advisory services and client accounting.
This article contains general information only and does not constitute tax advice or any other professional services. Before making any decisions or taking any action that might affect your income taxes, you should consult a professional tax advisor. This article is not intended for and cannot be used to avoid future penalties that may be imposed by the Internal Revenue Service.