In most cases, income earned on our platform is subject to income tax and should be reported in the same way as other sources of income. Currently, WishMerge does not have built-in tools to add sales tax or value-added tax (VAT) to purchases. Therefore, it is your responsibility to calculate and remit any applicable sales tax or VAT on your sales until such tools are made available.

Income Tax:

We recommend familiarizing yourself with the tax rules regarding income in your country. You may need to declare the income received through our platform and report it accordingly. If necessary, you can download 1099-K forms from Stripe, our payment processor, by following their provided instructions.

How to Charge Sales Tax or VAT?

WishMerge operates as a direct payment platform where contributors or supporters make payments directly into accounts. Because of this arrangement, WishMerge does not handle the collection and remittance of sales tax or value-added tax (VAT) on behalf of users. You are responsible for determining whether you need to register, charge, and pay sales tax or VAT based on your specific circumstances and location.

Will I Have to Pay Taxes on Donations Received?

Whether you have to pay taxes on donations received depends on several factors, including the nature of the donations, the amount, your tax jurisdiction, and how those donations are used. Here's a general overview, but please consult a tax professional for advice specific to your situation:

1. Personal Gifts: In many countries, small donations received from family or friends, which are given out of affection, generosity, or as gifts, are not taxable for the recipient. However, there might be gift tax implications for the donor depending on the amount.
2. Crowdfunding and Personal Fundraising: Money raised through crowdfunding platforms or personal fundraising can sometimes be considered taxable income, especially if the funds are for personal benefit and not linked to charitable activities. The tax treatment can vary widely depending on the purpose of the funds and local tax laws.
3. Charitable Donations: If you represent a registered nonprofit or charity, donations received are generally not taxable. However, the organization must adhere to specific guidelines and reporting requirements.
4. Business Donations: If you receive donations through a business, these can be considered income and may be taxable. How it's taxed depends on your business structure and local laws.
5. Tax Jurisdiction: Different countries have different rules regarding taxes on donations. For instance, in the United States, the IRS has specific guidelines for gifts and donations, including exclusion amounts for gift taxes and the taxability of crowdfunding income.
6. Usage of Donations: How you use the donations can also affect their taxability. For example, if donations are received and used for educational, charitable, or medical expenses, they may not be taxable.
7. Reporting Requirements: Depending on the amount and your jurisdiction, you may be required to report the donations on your tax return. Failure to report such income when required can result in penalties.

Because tax laws are complex and change frequently, it's advisable to consult with a tax advisor or accountant familiar with your specific circumstances and local laws. They can provide detailed advice on reporting requirements, tax liabilities, and any potential exemptions or deductions that may apply.

Note: To ensure compliance with tax regulations and to receive accurate guidance, we highly recommend seeking professional advice from a tax advisor who can provide personalized assistance based on your individual circumstances.

We hope this article has helped you understand how taxes work with WishMerge. Please feel free to reach out to us at [email protected] if you have any queries.