It is recommended to use a checking account exclusively to manage the funds received and payments made. It is also recommended to use an accounting software program to record the income and expenses related to the activity.
It is important to prepare and approve a budget, request written quotes for payments that are to be made, and make those payments directly to the previously approved providers.
Income Tax (Form 1040)
These money gifts between the donor and the recipient normally do not generate any type of income tax for them. Only the amount paid by the donor to a duly qualified charitable institution with the IRS may be deductible as an itemized deduction (Schedule A).
Gift Tax (Form 709)
These money gifts between the donor and the recipient normally do not generate any type of gift tax for them, as long as the amount of each donation does not exceed $19,000 annually for 2025.
Please make sure to follow these easy steps if you need help please consult a tax professional.
Author: Carlos Nazario CPA JD your TAX-Man. All rights reserved.