Taxing Your Kickstarter!

Being a part of a small production company or setting one up on your own as an indie filmmaker can be a rough spot to be in. However with the Internet, anything is possible, right? Yes, but not without a catch I am afraid.

Many know of the site Kick Starter and how it works. For those of you that don't, here is a simple picture pulled from Kick Starter itself, explaining it.

Seems too good to be true! The only downside is that you may not reach your goal of money and not get your project funded. But then there is that magically 'what if' you get above your goal. I'm talking $100,000 above your goal, do you have a plan for what to do with all that money? It may seem as a shock but projects get overfunded all the time on Kick Starter and similar sites. Kick Starter even has a page devoted to those who recently got over funded. 

I got the idea to do more research after having a great class discussion about what could happen once you go way over your initial price and the answer is simple...IRS will get you. I know it may sound scary and unreasonable since you didn't ask for all that money.

Here is a great article written from Forbes magazine describing just how something so good can bite you in the end. The article includes great tips and advice to help you if you get into that situation.

The most important thing I have ever been told and will certainly put to use within my company, is always have an attorney by your side. They can always help you or answer any questions that you may have. There are too many resources out there to help you find a great, legitimate one if the idea of searching for one is just too scary.

Overall, the idea of Kick Starter and IndieGoGo and similar sites may seem like a dream come true to most creative, starving artists but in reality can actually put you in a worse position if you are not aware of how the system works.