US Tax Changes
Added 2020-05-29 17:50:53 +0000 UTC
There are two things guaranteed in life; death and taxes. Apparently, the US has decided that SOME patreon rewards are taxable by SOME states. I have spent a good few hours researching and trying to understand this change and how I can lessen the impact (it turns out I can lessen it quite a lot). I will break down what I believe to be the case for you and how it impacts pledges to my account.
So, first point is non-Americans this does not apply to you, most of you already pay taxes on Patreon (although there is a small chance that the changes might actually reduce the amounts of tax you pay).
For Tier 1-2 Patreons your rewards to my understanding should not be taxable in most states so if you suddenly start paying tax please let me know and I will investigate further. However, you should pay ZERO tax.
Tier3-5 Some of your rewards are taxable in roughly half the states in the USA. However, based on my understanding of the guidance only 10% of your contribution is taxable. (15% for tier 5) so for example if you pledge $10 only $1 is taxable at a maximum of 11% so your tax would be $0.11 maximum.
So, I have spent a while setting up a complicated allocation of Sales Tax thing on patreon to try and ensure you as my patrons do not pay a penny more tax than is necessary.
Sorry if this is clear as mud, the tax law seems a bit barmy to me, there are also about 11 states where the tax is simply not applied for any, and different states have different rules on what is and is not taxable. All I have done is make sure that my tiers are appropriately broken down into the different rewards to ensure that you do not pay blanket tax on them all, as would happen if I had done nothing. I’m honestly trying my best to minimise the impact to you guys.
