Can we accept donations from Paypal and Google checkout

paypal
Creative Commons License photo credit: iliveisl

From my understanding, you can’t use Google checkout for donations unless we are a 501(c)(3)
http://checkout.google.com/support/sell/bin/answer.py?hl=en&answer=72721
http://www.google.com/support/forum/p/checkout-merchants/thread?tid=00a314399fff1200&hl=en

I do think you can use PayPal for donations, even if we aren’t a 501(c)(3). It’s taxable but considered a gift. Do I understand this correctly?

You are correct  that only donations to a 501(c)(3) organizations are tax exempt.

I read the links you provided and Google only allows 501(c)(3) and 501(c)(6) (Business leagues with a 501c3 charitable fund) organizations to accept donations.

Paypal is much  less restrictive (but the IRS determines which donations are tax deductible, not Paypal!)

If your organization’s website accepts donations and is not a 501c3, then the income is fully taxable.

FWIW, here’s a chart explaining the various 501c types and when tax deductible donations are allowed by the IRS: http://www.guidestar.org/help/501c_orgs.jsp

How can your homeschool group become a 501(c)(3) tax exempt organization? Start by reading these articles:

501c3 tax exempt status

Carol Topp, CPA
HomeschoolCPA.com

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