Fundraising and taxes....?

Question

I'm planning on holding a fundraiser event. Do I have to pay taxes on my profits if 100% of the proceeds go to my charity of choice? Also, is it my responsibility to make sure that people who donate money have their donations deducted from their taxes? Please help!

Answer 1

In the US if the fundraiser is done with the with the OK of the charity and 100% proceeds above expenses go to the charity it is not income to you and not taxable.   In addition while you can not deduct credit for your own time from your taxes you can deduct such things as gasoline (at a rate set by IRS) for driving to do this volunteer work.  See http://www.irs.gov for more on that.  You will need to keep accurate records and receipts.   As far as receipts for donations the law says a receipt must be given for any donation over $250 in a calendar yr.   If the donations you get from any one individual or family are greater than that amount they need to be in the form of a check or money order made out to the charity and the charity should send them a receipt.   If they are smaller technically you don't have to give a receipt but people like it when you do.   Receipt books are available in most dollar stores,  Wall-Mart type places, office supply etc.  Giving a receipt helps you too because it lets you prove what you took in so there is no question that the charity got all the money it should have gotten,   You might not conveniently be able to do that for something like a bake sale or car wash but you can still keep count of what you made.    

Answer 2

You can't allow the donors to get a tax deduction unless you are registered with the IRS as a Foundation.  You don't pay tax on the proceeds if all are donated to charity and that charity is recognized by the IRS. /