My daughter and two friends are going on a study abroad program in Spain. They all go to the same school and a teacher is accompanying them but the study abroad program is not really school sponsored. They are going in the summer following their 8th grade graduation from that school anyway.
We, the parents, want to have a fundraising dinner with a small silent auction. It has also been suggested that I get a square account so people can pay for their dinner and auction items by credit card. I don’t mind putting it in my name but I don’t want all of the funds that were raised to be considered my income.
The problem is how to account for the money given to us by friends and family. What is the best way to account for this fundraising money?
If your name is on the processing account then it will be reported under your Social Security Number. It sounds much like a crowdsource fund raising campaign like a Kickstarter effort.
Last year I wrote My Crowdfunding Donations to Help a Sick Friend Are 1099-K Taxable Income? that explained the current problems faced with these efforts.
A look at Kickstarter today still provides similar warnings, “In general, in the US, funds raised on Kickstarter are considered income.”
I’m not a tax expert so you’d really need to speak to a tax expert in your area for a definitive answer.
But Square says, “All credit card processing companies, including Square, are required by the IRS to report the earnings of those merchants who process over $20,000 and over 200 credit card payments (cash excluded) per calendar year before January 31.”
So Square may or may not be required to report income, depending on how successful your campaign is.