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Ask HN: How does tax deductibility work?

2 pointsby randallmaalmost 12 years ago
I&#x27;m building a site in which 501(c)(3) nonprofits can accept donations and fundraise through my service.<p>I understand that from the perspective of the user&#x2F;donator, you should get an email telling you how much to claim on your 1040 Schedule A form. However, I&#x27;m clueless as to how to handle this from the perspective of my service. Do I simply report the actual amount transferred to the nonprofit after fees, or are there extra steps&#x2F;forms to fill out that I&#x27;m missing?<p>(and since extra info can&#x27;t possibly hurt: we&#x27;re using Stripe as our payment processor)

2 comments

anigbrowlalmost 12 years ago
Find a co-founder that&#x27;s a lawyer. There is no way you should get into doing this without knowing what you&#x27;re doing - if you screw up you could be accused of fraud or tax evasion, and if you don&#x27;t have your bases covered someone else could use your service to engage in fraud and leave you holding the bag.
bobfirestonealmost 12 years ago
I know this isn&#x27;t what you want to hear but you really need to talk to an attorney on this. There are potentially significant implications for the donors and the charities that you work with if you don&#x27;t get it right.