The Potato Salad Kickstarter Could Be Liable For $21,000 In Taxes

Zack Danger Brown’s now viral Potato Salad Kickstarter fundraiser could be about to be faced with a nasty shock: $21,000 in tax liabilities.

As we reported 7 July, Brown started a kickstarter for his Fourth of July potato Salad and he had already made close to $50,000 at the time of writing; that figure is over $70,000 as of Wednesday afternoon.

According to Kickstarter, the money raised for the potato salad would be counted as income.

“In the U.S., funds raised on Kickstarter are considered income… A creator can offset the income from their Kickstarter project with deductible expenses that are related to the project and accounted for in the same tax year. For example, if a creator receives $1,000 in funding and spends $1,000 on their project in the same tax year, then their expenses could fully offset their Kickstarter funding for federal income tax purposes.”

The Tax Foundation has worked out that the liability will be around $21,000, based on deductible expenses, then Local, State and Federal taxes.

In total, Brown’s federal, state, and local tax burden on his income of $65,912 is $21,167.49 for an effective tax rate of 32.11 percent, leaving him with take home pay of $44,744.51 less taxes and expenses.

You can read how they come to that figure here.

They don’t give any allowance for an account in their figures though as a deductible, and if I was Brown as this point I’d be looking for a good one.

Duncan Riley


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