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Could your Facebook fundraiser or GoFundMe land you a big tax bill? Here's what to know before you start one

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These days, it only takes a few clicks to start a fundraiser to help others. But as a Connecticut middle school teacher who may owe a $16,000 tax bill for his Facebook fundraiser discovered, easy can come with costly complications. 

There are some considerations before you create a campaign. Toby Mathis, a partner and attorney at Anderson Law Group in Las Vegas, has some helpful tips.

Mathis said it’s perfectly fine to raise funds online either through a website or one of the many online apps available including Facebook, GoFundMe, PayPal, Venmo, Cash, or Zelle. Just make sure that you’re aware of any disclaimers.

For example, Facebook’s policy states that any funds received through a personal fundraiser on the social media platform may be taxable and that if more than $20,000 is raised, a 1099-K form from the Internal Revenue Service (IRS) will be issued by Stripe, a company that processes payments for personal fundraisers on Facebook.

Yes, it's tax season once again.

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And GoFundMe states its fundraisers are “usually considered to be personal gifts which, for the most part, aren’t taxed as income,” but there are some exceptions.

GoFundMe adds there may be “particular case-specific instances where the income is, in fact, taxable for organizers” that depend on the amounts received and how the funds are used.

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