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I Am Risking My Life to Help My Sick Husband

Question:

Dear Steve,

I started a GoFundMe page, not only to raise money, but to raise awareness so that my husband could get in the radar to receive a kidney sooner as opposed to later.

We are living off of fumes. I have always been the primary breadwinner but became disabled 6 years ago. I am keeping us barely alive with my Social Security Disability. There are no frills in this household. The stress of this is destroying my own health. I myself am doing without medical care, so that he can get care. I know, it isn’t an optimal situation, but I would rather risk my own life then risk him losing care he needs to not die.

So, any help would be greatly appreciated. We have received about $5,500 in donations thus far, and I want to maximize this, and am not sure the best way to do this without risking this generous gift.

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Barbara

Answer:

Dear Barbara,

It sounds like an impossibly stressful situation. I believe you are writing to me today because you are concerned over the potential tax liability of accepting money from others. It sounds as if you read my article My Crowdfunding Donations to Help a Sick Friend Are 1099-K Taxable Income?

The IRS has not provided any clear guidance on this subject to date. It has basically left people in two camps. One group of people insist they money is not taxable and will make that argument if or when they are confronted by the IRS. The second group of people have read the IRS available information and will hold a portion of the donated funds for taxes.

The situation is a mess at the moment. One issue that seems interesting is if the GoFundMe platform will report the income to the IRS is you receive less than 200 transactions and the total dollar amount raised is less than $20,000. While they are not required to report under those limits, there is no way to tell what their policy is without you calling them and talking to someone there before you assume they won’t report the donations.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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