Taxes and Crowd Funding

Everyone always asks how is the money from crowd funding taxed. The answer is always- it depends. I know you hate that. I hate that too. However, everyone’s situation is different. First of all, you need to let your tax professional know you have gotten funds from crowd funding. You must explain to that person what you are doing and how you are using the money.

If you are a non-profit, the tax consequences will be much different than if you are a for-profit business. If you have actually started a business, the tax consequences will be different than if you do not own any type of business. You have to decide if it is part of your personal taxes or your business taxes. All of this can be done BEFORE you raise money using crowd funding.

In the near future, there will be plenty of tax professionals who specialize in crowd funding situations. Right now you may need to educate them on what you did and exactly how you did it. Have all your records available for them. Show them which websites you used. Have copies of your emails and any offline materials you used to assist them in becoming familiar with crowd funding. Because this is such a new area you have to give them everything they need to set up your taxes correctly. There is nothing wrong with paying what you owe, you just don’t want to pay more than you owe. It takes a forward thinking tax professional to make it work for you.

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Celebrity Apprentice: Patricia Velasquez

I didn’t post anything last week because frankly the show was boring. Tia and Lou were the team captains and I knew Tia was going to lose. Penn got under Clay Aiken’s skin by doing very little to make it happen. I am not sure if Clay is high strung or not. Penn didn’t even flex hard and Clay was all pissy.

This week the challenge was a launch party for Crystal lite. Lisa expressed her goal of getting rid of the Latin Ladies. The women picked Aubry as the project manager and she sucked up to the Crystal Lite people during her manager acceptance speech. The guys picked Clay. Then in the car they found out no one was a real party person and had trouble with a theme. I don’t get it,  a party is a lot like a show and all those guys are in show business. So, what is the problem guys? Penn was completely silent and Chopper dude was looking out the window like a homesick summer camper.

The Gingers seem to understand the core of the task and lead their teams to get to work. Penn decides to contribute less as a defense mechanism. Patricia does not bow down to Lisa so Lisa takes it to Aubrey to be her back up. Teresa gets to work because she is the ultimate party planner. They show a shot of her measuring for furniture with gusto. The guys clearly feel at a disadvantage. The difference between the groups now is the women have open hostility towards each other and the men have theirs under wraps. Both are huge scary monsters just waiting to pounce. I feel the same anxiety as when playing with  a Jack in the Box, waiting for it to pop. It is exquisite!

Ivanka visits the men and Penn is at the store with Arsenio. They suck up to her and then throw Penn under the buss. Donald Jr. visits the women and Aubrey admits a major crush on him. I take it to mean, she’d do him in a second if he opened the door just an inch. She bats her eyelids and talks about all they are doing and Donald is completely bored by their idea. Teresa points out that they may be off track from their focus about health. Crystal lite is about fun, not healthy. Donald says they are missing the fun. The men were calling everyone to invite them to the party, while the women at the same point did not invite anyone yet. And seriously, I have not seen Miss World since the tasks were assigned. 

Come back from commercial, there she is! Taking pictures of plants with Debbie Gibson. Gibson also wrote an original song however,I am thinking by saying Crystal DELIGHT, and not lite, that might work against her. She goes into the studio to produce it and get copies to give out. The guys bring in music as entertainment for the party. The pressure is on the Gingers but so far neither has cracked. Turn the crank on the Jack in the Box, one more time.

It turns out that both parties looked fun. Arsenio kept pointing to the heavier set guests and guessing correctly that they were Clay-mates. Miss World invited more  queens in order to get more good looking people there. I did not say it, she did, on camera. Execs were impressed by Aubrey. Maybe they thought there was nothing going on under all that red hair. But they felt the guys did not have enough signage.

The women lost and Aubrey cried. Mr Trump must be one of those men that are affected by tears because he still gave her $10k of his personal money. Aubrey said she should stay because she is so valuable. Finally Miss World said the truth, Lisa and Aubrey lead the ideas and yet they have only won 2 out of 6. The men had figured that out long ago.

Aubrey brings all of Venezuela back into the board room. Patricia got fired. And that was that.

IndieGoGo Updates Their Algorithms

The crowd funding websites usually feature some projects on the front page. Those projects have an advantage in that mostly everyone visiting the site will see it and consider giving towards the success of the featured projects. Each site has different criteria for what is being listed on their front pages. IndieGoGo, one of the more popular sites has recently changed how they decide what goes on the front page. Much like Google, IndieGoGo has an algorithm it uses. They feel an algorithm is fairer. The algorithm will take into account how many comments a project gets and how much people are sharing it on social media. This means they are tracking your activity while you promote your project. Updating the pages often will also help. Basically if you do your work, get people to promote your page, view it and fund you, you will get the homepage advantage to help promote your project even more.

IndieGoGo is just one of many crowd funding sites. Many sites specialize in types of projects. For example, there are sites for education money, sites for just films and television, sites for scientists, sites for art only projects. You need to look at the different sites, see what they have to offer and find out as much as you can about what it takes to be featured on the home pages. For some sites, it is as simple as paying an extra fee. With sites that use an algorithm, you to have some understanding of what is being weighed. If the actual formula gets out, they will change it up again to keep it secret and keep people from “gaming” the system.

You have to make good use of your social media to make this work. Updates need to be frequent to keep people interested. As your project goes along, hopefully you can gain Facebook friends and Twitter followers because they got involved. Asking people to share and re-tweet can only help you reach that all-important financial goal.

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