![]() ![]() Use accrual accounting instead of cash accounting. So how can you legally avoid paying taxes? Do you think they then turned around and gave the U.S. Tesla, for example, pre-sold $10 billion on their Model 3 in two days. The truth is, pre-sales are not a new thing. If you then turn around and give 35% of your campaign to Uncle Sam in taxes, you’re going to literally kill your business. Once you add in Kickstarter marketing costs, Kickstarter fees, canceled pledges, cost of tooling and molding, and international shipping, you’d be lucky to have a 20% margin on your Kickstarter. Giving Away 35% of Your Campaign is Crazyįirst, let’s be honest: Kickstarter campaigns are hard, and your margin is lower than you’d hope.Ī normal eCommerce business is lucky to have 35% margins. These are, most likely, paid writers – not tax professionals.Īs someone who raised over $200,000 in crowdfunding, and worked with various (paid) tax experts to come up with a tax strategy, I thought I’d share a bit more about how to think about and reduce your Kickstarter taxes.ĭisclaimer: I am not a CPA, financial advisor, or accountant. This is a terrible idea.Įven journalists on NBC and Forbes have tried giving Kickstarter tax advice. They recommend spending the money quickly, or paying the tax as ordinary income. There’s a ton of bad and conflicting advice on the internet.įor example, Kickstarter’s tax help page recommends treating your Kickstarter funding as ordinary income. But First, Make Your Campaign a Success.Giving Away 35% of Your Campaign is Crazy. ![]()
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