GoFundMe is breaking records for the amount of money raised to assist victims of the Las Vegas shooting, raising questions about the fees and tax implications of these services.

Dozens of donation pages have been created to help the victims and their families — including Santa Clarita residents Dominica Zeolla and Cesar Ranuschio — but what some donors may not realize is that about 8 percent of those funds are set to go to fees.

The Fees

GoFundMe warns of “sites claiming to be 100% free,” claiming some of those sites “will charge your donors up to 15% and you’ll still need to pay 3% for processing.”

There are several crowdfunding sites, including GoFundMe, that are supporting the victims of the shooting. These sites raise money by receiving many small donations to reach a posted goal.

GoFundMe takes out 5 percent, and another 2.9 percent goes to WePay, the third-party company that processes payments for the site.

Is it Tax Deductible?

There are tax implications for the donor using crowdfunding sites; if the donation is to an individual and not a registered non-profit, it may not be tax deductible.

“Donations made to personal campaigns are generally considered to be personal gifts and are not guaranteed to be tax-deductible,” states the GoFundMe site.

Only donations made to valid U.S. registered 501(c)3 charitable organizations are guaranteed to be tax-deductible, according to the IRS.

There are local nonprofits, such as the Santa Clarita Coalition, which are assisting victims of the Las Vegas tragedy from Santa Clarita.

Other Tax Implications

In addition to the tax implications for people giving to GoFundMe, there also might be some concerns for the recipient of the donation as well.

Third-party payment processing companies WePay and PayPal handle the funds raised by GoFundMe in the United States.

WePay is required by law to report any GoFundMe that has raised over $20,000 and 200 separate donations to the IRS, according to their site.

After sending a report, WePay determines who to mail a 1099-K tax form to report the income from the GoFundMe donations.

According to WePay, the company will not send a tax form for any payments that are considered “gifts or donations.”

The IRS considers the payment a “gift” if the person donating funds expects no compensation in return, according to their website.

If you want to help the victims of the Las Vegas shooting you can still donate to GoFundMe, but residents are encouraged to keep these fees and taxes in mind.

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