GoFundMe Pages: Tax Implications and Common Questions Answered

GoFundMe and similar crowdfunding platforms have become a popular way for individuals to raise money for various causes, from medical bills and education expenses to community projects and disaster relief. Burning questions that I am currently being asked by my family and friends are: What happens to the funds raised? Are they taxable? Can donors claim charitable contributions? Let’s dive into these questions to clarify the tax implications for both organizers and donors.

Is GoFundMe Income Taxable

The taxability of GoFundMe funds depends on the intent and use of the money. Generally:

Personal Causes: If you raise money for personal reasons, such as covering medical expenses or helping with unexpected hardships such as the loss of a home, the funds are typically considered a gift and are not taxable to the recipient.

Business-Related Campaigns: If the funds are raised to support a business or entrepreneurial venture, the money may be considered income and subject to taxes. In such cases, it’s essential to keep detailed records and consult a tax professional.

Can Donors Claim Charitable Contributions?

Not all donations to GoFundMe campaigns are tax-deductible. To qualify as a charitable contribution:

• The recipient must be a registered 501(c)(3) organization or a recognized nonprofit.

• The donation must not provide any personal benefit to the donor (e.g., receiving goods or services in return).

  
  

Donations to personal causes, such as helping a friend with medical bills, are not tax-deductible, even if made with the best intentions.

Gift Tax Implications for Large Donations

When funds are raised for personal use, they are typically treated as gifts from the donors to the recipient. Here’s what you need to know:

Annual Exclusion: In 2025, the annual gift tax exclusion is $17,000 per donor, per recipient. This means that a donor can give up to this amount without triggering gift tax reporting requirements.

Exceeding the Exclusion: If a donor gives more than $17,000 to a single recipient in a year, the excess must be reported on a gift tax return (Form 709). However, most donors will not owe taxes because they can apply the excess against their lifetime gift and estate tax exemption.

Tax Consequences of Raising Large Amounts

If a GoFundMe campaign raises significant funds, the recipient may need to:

1. Keep Records: Document how the funds are spent, especially if they are for specific expenses like medical bills or educational costs.

   
   

2. Report to the IRS: While gifts are generally not taxable to the recipient, funds used for business purposes may need to be reported as income.

   
   

3. Consult a Tax Professional: This ensures compliance with tax laws and minimizes potential liability.

   
   

Taxpayers in disaster-affected areas, such as those impacted by California wildfires, per the previous blog have additional time to file and pay taxes. The IRS has granted extensions (October 15, 2025) for these taxpayers, allowing them to focus on recovery.

Crowdfunding can be a lifeline during challenging times, but it’s crucial to understand the tax implications. Whether you’re organizing a campaign or donating, staying informed helps avoid surprises come tax season. If you have questions about crowdfunding and taxes, or need assistance navigating the rules, reach out to us at info@mkhstaxgroup.com. I’m here to help you understand your responsibilities and make informed decisions.