Table of Contents
Share this article
Valor Tax Relief Team
Professional Tax Resolution Specialists
Introduction
Key Takeaways
- Personal GoFundMe donations for medical expenses, education, or emergency relief are typically considered non-taxable gifts by the IRS.
- Donations become taxable income if donors receive something of value in return, if an employer sets up the fund, or if funds are raised for business purposes.
- Personal GoFundMe donations are generally not tax-deductible for donors unless made to verified 501(c)(3) charitable organizations.
- Donors who give more than $19,000 per recipient in 2025 may need to file a federal gift tax return, though few actually owe gift taxes due to lifetime exemptions.
- GoFundMe may issue Form 1099-K to campaign organizers if total payments exceed $5,000 in 2025, which requires proper tax classification of funds.
- Both donors and recipients should maintain detailed records of donations and receipts to ensure compliance with IRS regulations and support proper tax reporting.
Online crowdfunding has revolutionized fundraising, enabling people to quickly gather financial support for diverse needs including healthcare costs, disaster recovery, educational funding, and personal goals. GoFundMe stands out as a leading platform connecting campaign organizers with potential supporters. As these platforms grow in popularity, questions about tax treatment of crowdfunding proceeds become increasingly important.
What are the tax obligations for GoFundMe donations? Can contributors claim tax deductions? This detailed resource addresses these essential concerns, providing comprehensive information about how federal tax laws apply to crowdfunding contributions. Understanding these regulations enables both contributors and recipients to fulfill their tax duties correctly and prevent surprise tax bills.
How GoFundMe Works
Platforms such as GoFundMe offer an efficient method for people to request financial support from their personal networks and broader communities. To get started, you create a campaign page featuring a compelling title and detailed description of your fundraising objective, along with setting a monetary goal.
After launching your campaign, distribute it across social networks, email lists, and other communication methods. Supporters can contribute funds securely through GoFundMe's integrated payment system, which accepts credit cards, debit cards, and occasionally third-party services such as PayPal. Once contributions accumulate, you can transfer the collected funds to your account, with platform fees automatically deducted.
Are GoFundMe Donations Taxable?
Most people wonder if GoFundMe donations are taxable. Generally, personal donations for medical expenses or educational costs are considered non-taxable gifts by the IRS. However, if donors receive something of value in return, the transaction may be classified as a sale, making it taxable income. GoFundMe does not report funds to the IRS or withhold taxes.
When Donations Become Taxable Income
While personal GoFundMe donations are typically non-taxable, several specific scenarios can cause the IRS to classify these funds as taxable income:
Donations in Exchange for Goods or Services
If you offer something of value in exchange for a donation, the IRS may view this transaction as a sale rather than a gift. Since profits from sales are taxed as income, the "donation" would be considered taxable.
For example, if you promise donors a product, service, or other benefit in return for their contribution, those funds must be reported as taxable income on your tax return.
Employer-Organized Campaigns
When an employer sets up a GoFundMe campaign for an employee, the funds are typically considered additional income and are subject to taxation accordingly.
This classification applies because the employer-employee relationship creates a different tax context than personal gifts from friends or family members.
Funds Not Given to Intended Recipient
If someone organizes a GoFundMe campaign on behalf of another person but does not transfer the funds to that individual, the money would be considered taxable income to the organizer and added to their gross income.
This situation can create significant tax complications, so it's essential to ensure funds are properly transferred to the intended beneficiary.
Business Ventures and Profit-Generating Activities
If you use GoFundMe to raise money for a business venture or profit-generating activity, the funds received are generally treated as taxable income by the IRS.
For instance, funds raised for a business startup may be considered income or capital contributions and subject to income tax. Business-related crowdfunding involves intricate tax regulations, making professional tax consultation highly advisable.
Are GoFundMe Donations Tax-Deductible?
Understanding tax deductibility rules helps maximize potential benefits. Contributions to personal GoFundMe campaigns for medical bills, educational costs, or emergency situations are typically classified as personal gifts by the IRS and do not qualify for tax deductions.
The situation changes when you contribute to campaigns benefiting registered 501(c)(3) nonprofit organizations. These charitable contributions can qualify for tax deductions, but you must confirm the organization's tax-exempt status with the IRS before claiming any deduction. GoFundMe offers features for direct donations to verified charities. To claim deductions, maintain thorough documentation including donation receipts and payment confirmations from your financial institution.
Gift Taxes and Record-Keeping
Understanding Gift Taxes on GoFundMe Donations
Federal gift tax regulations apply when donors contribute substantial amounts through crowdfunding platforms. The IRS defines gifts broadly to include cash, real estate, artwork, vehicles, and other assets. For 2025, the annual exclusion is $19,000 per recipient, allowing gifts up to this amount without triggering reporting requirements.
When annual gifts exceed $19,000, you must file Form 709 with the IRS. Most donors never pay gift taxes because the lifetime exemption—$13.99 million for 2025—typically covers all lifetime gifts. Only after exhausting your lifetime exemption will you face gift tax rates of 18% to 40% on additional gifts. Filing a gift tax return doesn't necessarily mean you'll owe taxes; payment obligations only arise after exhausting your lifetime exemption.
Record-Keeping for GoFundMe Donors and Recipients
Both campaign organizers and contributors must maintain comprehensive documentation to meet IRS requirements. Organizers should work with qualified tax professionals, while donors to verified 501(c)(3) organizations need to preserve platform receipts and transaction records from their financial institution.
The IRS requires written acknowledgment from charities for contributions of $250 or more. GoFundMe may not automatically provide this, so donors should request it directly. Recipients must track all funds to classify them as non-taxable gifts or taxable income. Personal campaigns for medical costs, education, or emergencies typically result in non-taxable gifts, while funds received for products, services, or business purposes generally constitute taxable income.
1099-K Forms for GoFundMe Campaign Organizers
GoFundMe may send Form 1099-K when total payments exceed $5,000 in 2025 (some states have lower thresholds). Receiving a 1099-K doesn't automatically indicate taxable income, but it means the IRS has been informed about these payments, making accurate fund classification essential.
The tax landscape for crowdfunding involves numerous complexities that benefit from professional guidance. Tax professionals can help donors understand deduction eligibility, guide recipients through proper income classification, and address state-specific tax considerations.
Getting Tax Help for GoFundMe Users
Both campaign organizers and contributors have specific tax obligations. Organizers should operate with transparency and properly document all funds. Contributors should aim to remain within annual gift tax exclusion limits when possible. When contributions exceed these limits or lifetime exemptions are fully utilized, timely filing of required tax forms and payment of any owed taxes becomes essential.
Maintaining organized documentation, confirming charitable organization tax-exempt status before donating, and seeking guidance from qualified tax professionals are fundamental practices for maintaining compliance. Implementing sound financial security measures can also help protect your crowdfunding transactions.
Conclusion
Navigating tax requirements for GoFundMe campaigns requires careful attention from both organizers and contributors. Personal campaigns supporting healthcare costs, educational needs, or disaster recovery usually result in non-taxable gifts, but certain situations create taxable income obligations. Contributors need to understand gift tax thresholds and deduction eligibility, while campaign organizers must accurately categorize received funds and keep thorough documentation. The intricate nature of crowdfunding tax regulations makes professional tax guidance invaluable for maintaining compliance and preventing costly tax surprises.
Need Help with GoFundMe Tax Questions?
Don't let tax uncertainty affect your crowdfunding campaign. Get expert tax advice today and ensure you're compliant with IRS regulations.
Get Your Free Consultation