Crowdfunding and Taxes

So I went to my accountant to do my taxes yesterday, because when you live in Massachusetts and you have a shiny new mortgage, you don’t want to mess up your taxes for that year.  After we worked through all my many failings as a person who makes optimal decisions based on the state and federal tax codes, we had a chance to chat about Slower Than Light.

I was a bit concerned about the prospect of raising money for this project from a tax perspective.  There is a fair amount written on the Internet about crowd funding and the like, and some of it covers how Kickstarter pledges are taxed.  That said, I am always a bit skeptical of information I read on the Internet, so I was grateful to talk to an actual professional regarding the issue.  We also talked a little bit about what, if any, corporate structures would make sense depending on how much money I raised and if I needed to bring more people onto the project.  It turns out there were no big pitfalls in my expected path, but there were a few close by that I could stumble into if I wasn’t careful.  As someone who has owed thousands of dollars in unexpected taxes because he did something dumb, I’m always a bit leery of such things.

On the upside, the management side of STL is going well, and I feel like I have a very good handle on how the financial side of the project is going to run if we manage to fund, and what records  I need to maintain the way I normally do, and which records I need to pay special attention to for tax purposes.

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