Car accidents can happen at almost any time at nearly any place while you’re driving, and the same could be said for those walking near where moving vehicles are present. This rule is especially true for California, where the state’s high population centers drive up the number of interactions between cars and people.

Injuries from car accidents and other similar occurrences can prove painfully expensive, particularly for those who lack the income to afford quality insurance to begin with. As such, many victims of these accidents go to crowdfunding sites like GoFundMe, a website dedicated to setting up personalized campaigns and organizations for people to donate to.

Tricky Taxes

While GoFundMe can serve as a person’s quickest or most direct way to receive funds for medical bills or similar expenses, it is also important to keep in mind taxes. Crowdfunded sources of income can potentially contribute to a person’s gross income depending on the nature of the campaign and what the donations are going toward.

For example, according to tax experts at Taxfyle, money received for the purpose of paying off medical expenses generally goes untaxed, as these finances are legally considered “gifts.” If that money were to go toward paying off travel expenses, however, the same rules may not be applied.

There are additional factors to consider when setting up a GoFundMe campaign, such as the amount of funds donated and attaining and maintaining nonprofit status.

The IRS sets limits on how much money an individual can receive through a crowdfunding campaign before that individual must start paying taxes on that amount. In these instances, gift taxes are also taken into account, which affect both the donor and the recipient. It can be difficult to know for sure whether a particular donation will warrant a gift tax, necessitating tax assistance from experts.

Likewise, it can be difficult to avoid having your crowdsourced funds taxed if they aren’t processed through a charitable organization with a recognized tax-exempt status.

Given the number of interweaving rules, laws, and compliances to keep in mind to avoid tax implications on finances through GoFundMe and other crowdsourcing sites, it’s best to consult with experts throughout the process to make sure you’re getting the most out of the campaign to receive the funds needed to recover from an otherwise debilitating accident.

An Alternative to Crowdsourcing

Although crowdsourcing money to help pay for medical expenses can be accessible for some, it can also prove complicated and potentially more trouble than it’s worth, depending on the nature of the campaign.

Fortunately, there is an alternative. With the help of a truck accident lawyer, you could meet with a team of trained individuals dedicated to helping you receive the compensation you deserve for an accident you or a loved one have experienced.

By calling in a truck accident lawyer, also capable of assisting in cases involving motorcycles, pedestrians, or slips/falls, you do yourself the favor of calling in a firm willing to do the work of finding all available evidence and then some to support your case.

Consider which approach is right for you and your needs, but as with any insurance-related situation, remember to make your decision quickly and decisively to get the best possible outcome.

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