Ask HN: How does tax deductibility work?

#1

Post by _yfoe » Sat, Jun 15, 2013, 4:19 AM UTC

I'm building a site in which 501(c)(3) nonprofits can accept donations and fundraise through my service.

I understand that from the perspective of the user/donator, you should get an email telling you how much to claim on your 1040 Schedule A form. However, I'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/forms to fill out that I'm missing?

(and since extra info can't possibly hurt: we're using Stripe as our payment processor)

Re: Ask HN: How does tax deductibility work?

#2

Post by anigbrowl » Sat, Jun 15, 2013, 5:15 AM UTC

Find a co-founder that's a lawyer. There is no way you should get into doing this without knowing what you're doing - if you screw up you could be accused of fraud or tax evasion, and if you don't have your bases covered someone else could use your service to engage in fraud and leave you holding the bag.

Re: Ask HN: How does tax deductibility work?

#3

Post by bobfirestone » Sat, Jun 15, 2013, 5:20 AM UTC

I know this isn'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't get it right.