5 Tax Tips For Rewards-Based Crowdfunding Campaigns

By Ama Sarfo (April 13, 2015, 3:53 PM EDT) -- Internet-based crowdfunding websites like Kickstarter and Indiegogo are seducing a new wave of entrepreneurs attracted to fresh, viral formats and the potential to raise quick money in exchange for small prizes given to backers. But where money lies, so do taxes — and entrepreneurs must be aware of several key tax considerations before they accept pledges from strangers.

Incorporate Before You Start

Entrepreneurs often launch crowdfunding campaigns in their own name, but they shoulder a heavier tax burden using that approach because they are personally responsible for paying taxes on that income. The best way to avoid this result is to...

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