Question about donations... (legal terms?)

[MrAniman2]

Hey guys, i have had this question for a while.
I'm running a small server and finally i have decided to offer my players a way to donate (purchase ranks(mainly cosmetic perks)) so how do you (server owners) handle donations...i mean taxes and all that legal stuff? I know that every country have it's own laws and money limits you legally don't have to pay taxes for....but just overall:
What type of paypal account would be the best?
Should i change paypal accounts each few months so it doesn't look that i'm receiving money into one account?
Does paypal really notify government agencies if i'm receiving around 100-300$ per/month into my account...or they pretty much don't care about such a small amount of money?
And is there any more things i should know?

Feel free to pm me if you don't want to write publicly, thank you.

 

[thebaum64]

If you are using PayPal, you do not have to pay taxes until you exceed 600$ a year. Once you reach that, you must file taxes I believe.

 

[MrAniman2]

If you are using PayPal, you do not have to pay taxes until you exceed 600$ a year. Once you reach that, you must file taxes I believe.

Uhh i think i have already reached that ...

But i'm very curious is there any server owner who could give me advice from his own experience?

 

[thebaum64]

Regarding the EULA, mojang doesnt give a fuck unless you are hypixel or mineplex

Pretty much true tbh

 

[MrAniman2]

Regarding the EULA, mojang doesnt give a fuck unless you are hypixel or mineplex

Yeah i pretty much know that but the real question what bothers me is: Will Paypal notice if there will be a lot of incoming transactions into my account? ...or it depends on account type? (personal, premium, business)

Seems that no server owner wants to share their experience...

 

[Fenix]

Guys, I just started a server so that aspect of this is new to me, however I have owned a coffee roaster/cafe for several years now, so I can tell you this much... Nowadays PayPal wants your tax Idnumber reguardless if you specify business. My advice to you is keep this simple, one of the users above from Canada said to specify these are donations and the reward is a thankyou... Do that, keep it a personal account... If you made over 10k in a year from this you will have to file taxes... Just use turbotax or something like that and it will be easy... You can declare this as a gift...

 

[iUpate]

I (canadian) have made over 20k from MC and never had to enter a tax id or pay taxes..

Same.

I don't believe that the IRS would really care because if everyone who has a Minecraft server or makes money off of gaming files a tax report that would just mean they have to allocate more resources in order to keep track of all the income that people are claiming they receive. Also the idea of earning money off of donations and streaming etc is fairly new and can be considered controversial in some cases. Also if you were to file in your tax report with your income and someone charges back on their $5000 purchase (example) it'll be a hassle for you. In the end I don't think anyone gives a sh1t

 

[AllenCC]

If you live in The United States PayPal will report the money you received via a 1099-k form if you received over 20k in payments AND the total number of payments were over 200.
You are technically still required to report and pay taxes on all income even if its under $600 but if that income was never reported the IRS would probably not find out.