Highlighted are things I don’t know about.
This is if you want your mutual aid network to have similar capabilities as a non-profit. Doing mutual aid with friends is an easy alternative.
The following is based on this video:
This is a list of financial options for mutual aid groups.
Single member account or personal profile
Example:
personal bank account with venmo, paypal, ca$happ.
So if people send donations to my bank account.
Pros
informal and quick
Cons
accountability: person could easily steal money, person could lose interest
Venmo, Paypal, banks: political ideology wise, they are not our friends- they take a percentage of funds (5-7%) as with any account
Taxes:
Gift tax important benchmarks: donations of or more than...
15,000 dollars causes tax issues
11 million dollars causes tax issues
1099:
Payments to independent contractors/vendors will require a 1099-misc
For Venmo, the IRS will be contacted for 1099 stuff if there are:
Over 20,000 in gross payments
200 separate payments in one calendar year
Venmo can technically do that beforehand, but it is not in their best interest from a profit standpoint.
A new thing that states are doing:
Payments of 600 dollars or 1000 dollars can trigger a 1099.
Gross income is different from gift income. They have different legal standards
Unincorporated association or business account
-free and easy
-dealing with the requirements of the bank or credit union
Can declare one’s group as a 501c3 without dealing with the paperwork (less than 5,000 dollars revenue)
Fiscal sponsor
Incorporated entity
Example: nonprofit without tax exemption, LLC, cooperative
Tax exempt organizations
Example: 501c3, 501c4, there are many more categories
Fiscal Sponsor
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