Most GoFundMe donations count as personal gifts, so the recipient usually owes no federal income tax, yet payouts tied to work, sales, or business activity can be taxable.
You raised money on GoFundMe and now one thought keeps popping up: “Will this mess up my taxes?”
The platform doesn’t decide your tax result. Your facts do. The IRS looks at why people paid, what they received in return, and who benefited from the transfer. One fundraiser can be a gift. Another can be income.
This article gives you a clear way to sort your campaign, handle Form 1099-K if it shows up, and file with records that back up your story.
What Makes Crowdfunding Money Taxable Or Not
The IRS starts with a broad rule: money you receive can be taxable unless a law excludes it. Gifts are one of the common exclusions, which is why many personal GoFundMe campaigns end up non-taxable for the recipient. The IRS has a plain-language explainer on crowdfunding that lays out this gift-versus-income split and pushes good recordkeeping.
To sort your own fundraiser, answer three questions in plain words.
- Why did people give? Was it to help you personally, or to pay you for something?
- What did the payer get? A thank-you is fine. A product, service, or paid access can push the payment toward income.
- Who got the benefit? If you raised money for someone else, you may be a pass-through, and the tax result may belong to the true recipient.
Are GoFundMe Funds Taxable? When The IRS Treats It As Income
Many campaigns fit the gift bucket. Some do not. GoFundMe money can be taxable when it works like payment connected to work, sales, or a trade or business.
Personal Gifts: The Common Non-Taxable Case
Many pages are built around hardship: medical bills, funeral costs, rent after a layoff, or a family hit by a disaster. When donors give from generosity and receive nothing of value, the transfer can fit the gift bucket.
GoFundMe tells organizers that donations to personal fundraisers are generally treated as personal gifts in the United States, with case-by-case exceptions. The IRS also notes that gifts are usually not part of the recipient’s gross income.
Patterns That Can Turn A Fundraiser Into Taxable Income
- Selling goods. Merch, art, baked items, or any tangible item shipped to donors.
- Providing services. Lessons, coaching, design work, repairs, freelance gigs.
- Running a business fundraiser. “Help my shop stay open” can tie to business revenue and expenses.
- Offering perks with value. Tickets, member access, ad placement, paid shoutouts.
- Replacing pay. Tips or “support my work” payments can act like compensation.
If your campaign has mixed payments, you can separate the taxable part from the gift part using reasonable records, then report only the taxable slice as income.
Donor Deductions Are A Separate Topic
Donor deductions depend on whether the fundraiser runs through a qualified charity or a verified nonprofit setup. That donor-side rule does not decide your income-side rule, yet it can hint at the fundraiser structure.
How Form 1099-K Fits In With GoFundMe Payouts
Sometimes the first clue arrives by mail: Form 1099-K. Payment platforms can send it when payments meet reporting thresholds, and the IRS gets a copy. Seeing a 1099-K can feel like a verdict, but it isn’t. It’s a report of gross payment volume, not a label that says “taxable.”
The IRS has a Form 1099-K FAQ section on crowdfunding. It states that some crowdfunding proceeds can be taxable and some can be gifts. So the form is a prompt to keep your story straight and your records tidy.
Why You Might Get A 1099-K Even For Gifts
Payment reporting tracks money flow. It does not track intent. If your fundraiser moved enough funds through a third-party network, you can receive a form even when donors meant it as a gift.
What To Do When You Receive One
Match the form to your payout history for the year. Then build a simple “money map” that ties to your bank records:
- Total received through the platform
- Platform fees, refunds, and chargebacks
- Transfers to a beneficiary, if you organized for someone else
- What stayed with you, split into gift-like versus taxable buckets
Don’t ignore the form. If the IRS sees it and your return shows nothing, you can trigger letters that waste weeks.
GoFundMe Tax Rules For Common Campaign Types
Real fundraisers can get messy. A page can start as “help with rent,” then add a merch perk midstream. Small changes can swing the analysis. The goal is to describe what happened, then report the right part in the right place.
| GoFundMe Scenario | Typical Federal Income Tax Result | What To Save |
|---|---|---|
| Medical bills or emergency living costs | Often a gift to the recipient | Campaign text, medical bills, bank deposit trail |
| Funeral or memorial fundraiser | Often a gift to the family or named beneficiary | Funeral invoices, payout records, transfer list |
| Disaster relief for a household | Often a gift; some relief can be excluded by law | Repair receipts, insurer letters, payout log |
| Raising money to start or run a small business | Can be taxable business income | Expense receipts, bank statements, notes on use of funds |
| Selling art or merch through “donations” | Usually taxable sales income | Orders, shipping proof, refund list, cost records |
| Organizing a fundraiser for a friend | Organizer may be a pass-through | Transfer proof, recipient bills, organizer fee details |
| Creator perks or paid access tiers | Often taxable income | Perk descriptions, deliverables, payout reports |
| School or team trip fundraising not run by a charity | Can be gifts; can be income if tied to sales | Who benefited, receipts, any items sold |
A Simple Way To Classify Your GoFundMe Money
Set a timer and sort your campaign once. Save the notes with your tax files.
Write A One-Sentence Purpose Statement
Use the same wording you used in the campaign: “Help me cover surgery costs.” “Raise funds to ship preorders.” “Keep my shop open through a slow season.” A clear purpose statement keeps your filing consistent with your public story.
List Anything Donors Received
Write “none” if that’s true. If you offered items, access, or services, list them. If you offered a public shoutout, ask whether that shoutout carried a business benefit.
Split The Total Into Three Buckets
- Gift-like payments: no return benefit, personal motive.
- Sales or service payments: tied to a product, service, or access.
- Pass-through funds: collected by you, then paid to another person or entity.
Your buckets should add up to the money that hit your bank. If they don’t match, fix the log before filing.
How To Report Taxable GoFundMe Income
If your taxable bucket is small and tied to one-off sales, you still report it, but your recordkeeping can stay simple. If you used GoFundMe as part of ongoing self-employment, you usually report the income as business receipts and match it with related expenses. Either way, keep the “money map” that explains your split.
The IRS gift tax rules can help you frame gift-like transfers: gifts are generally a donor-side concept, and many gifts fall under exclusions for the donor. That’s separate from income tax, yet it supports the idea that a true gift is not wages or sales proceeds.
| Tax-Time Situation | Where It Often Gets Reported | Notes For Cleaner Filing |
|---|---|---|
| Pure gift fundraiser for personal hardship | No federal income line item | Keep receipts and a donor-intent record in case of questions |
| Mixed campaign: gifts plus merch | Report only merch-related income | Keep a split log that ties items shipped to dollars received |
| Creator perks or paid access | Business income (often Schedule C) | Track what you delivered and what it cost to deliver |
| Business fundraiser used to pay operating bills | Business income (often Schedule C) | Match spending to business expenses with receipts |
| Organizer collected for someone else | Depends on who owned the funds | Keep proof of transfers and who paid the underlying bills |
| Refunds and chargebacks | Reduce gross receipts for the taxable bucket | Keep platform reports and bank entries showing reversals |
| Form 1099-K received for mostly gifts | Return may still show zero taxable income | Keep a worksheet that reconciles the form total |
| Nonprofit fundraiser with tax receipts for donors | Income handled by the nonprofit | Confirm the fundraiser setup and who receives the funds |
Records That Cut Down Follow-Up
The IRS crowdfunding guidance ties a lot of outcomes to documentation. You do not need fancy software. A clean folder works.
- Campaign snapshot: page text, updates, perk list.
- Payout log: dates and amounts that hit your bank, plus fees.
- Use-of-funds receipts: bills, invoices, rent statements, medical receipts.
- Transfers: proof of money sent to a beneficiary, plus the reason.
- Tax forms: any 1099-K and related mail.
Common Mistakes That Create Tax Trouble
- Ignoring Form 1099-K. Even if the money was gifts, you still want a reconciliation on file.
- Reporting the full gross amount as income. Mixed campaigns often need a split.
- Mixing personal and business spending. One blended account makes proof harder.
- Organizing without tracking transfers. If you raised money for a friend, save proof of where it went.
If you can explain your fundraiser in two calm sentences and back it with records, you’re in a solid spot.
References & Sources
- Internal Revenue Service (IRS).“Money received through ‘crowdfunding’ may be taxable.”Explains gift versus income treatment for crowdfunding and stresses keeping clear records.
- Internal Revenue Service (IRS).“Form 1099-K FAQs: Common situations.”States that some crowdfunding proceeds can be taxable while some can be gifts, and explains how 1099-K reporting fits.
- Internal Revenue Service (IRS).“Frequently asked questions on gift taxes.”Summarizes gift tax basics and common exclusions that help separate gifts from sales and compensation.
- GoFundMe Help Center.“Taxes for GoFundMe organizers.”Explains how personal fundraisers are often treated as gifts and flags cases that can be taxable.