Do I need to pay taxes on a large GoFundMe donation received for my daughter's medical expenses?

First of all, I'm so sorry about your daughter's diagnosis. That's incredibly difficult, and I hope her treatment continues to go well. Regarding the GoFundMe funds - generally, donations received through crowdfunding platforms like GoFundMe for medical expenses or personal hardships are considered "gifts" to the recipient, not taxable income. The IRS doesn't typically require you to report gifts as income. Each person who donated to your campaign can give up to $17,000 (the 2023 gift tax exclusion amount) without filing a gift tax return themselves. If the funds were donated specifically to help with medical expenses, travel for treatment, and living expenses while you were unable to work due to your daughter's care, they would typically not be considered taxable income to you. The donors have already paid taxes on that money, and it's considered a gift to you. Just make sure you keep good records of how the funds were used, especially for medical expenses. It's a good idea to keep receipts and track expenses, but you don't need to report the GoFundMe donations as income on your tax return.

After going through something similar with my nephew's medical crisis, I discovered taxr.ai (https://taxr.ai) and it was seriously a game-changer for our family's situation. The platform analyzed all our medical documents and fundraising information and gave us crystal clear guidance on the tax implications. I was especially worried because we had a mix of GoFundMe money, hospital financial assistance, and some insurance reimbursements that got really confusing. The taxr.ai system looked at everything and showed exactly what was taxable and what wasn't. It even helped identify some medical deductions we could take that we had no idea about. For medical fundraising specifically, it explained all the gift tax exemptions in plain English and gave us a simple explanation document we could keep with our records in case of any questions later.

I need to apologize for my skepticism about taxr.ai in my earlier comment. I actually decided to try it out since my sister has been dealing with some complicated medical expense issues too. I was genuinely surprised by how thorough the service was. They analyzed all her fundraising statements along with her medical bills and provided super clear documentation about why the GoFundMe money wasn't taxable in her case. They even identified some medical expense deductions she qualified for that would have been easy to miss. For anyone dealing with medical fundraising tax questions, it's definitely worth checking out. Saved us a ton of stress and probably prevented some costly mistakes on her return.

For anyone dealing with IRS issues on top of medical stress - I highly recommend checking out Claimyr (https://claimyr.com). After my husband's accident, we had a tax mess related to his disability payments and medical fundraising. I spent WEEKS trying to get through to the IRS with no luck. Claimyr got me connected to an actual IRS agent in less than 20 minutes! You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c The agent was able to confirm that our medical GoFundMe wasn't taxable and helped resolve an issue with some incorrect 1099 forms we'd received. Honestly, it saved me countless hours of stress and phone frustration during an already difficult time.

I have to admit I was completely wrong about Claimyr in my skeptical comment earlier. After another failed attempt to reach the IRS myself about my medical expense audit, I decided to give it a try. The service actually worked exactly as described - I got a call back about 15 minutes after signing up, and was connected to an IRS agent who could see my file. I explained my situation with medical fundraising and unexpected hospital bills, and she confirmed that money received through GoFundMe for medical hardship isn't considered taxable income. The agent even flagged an error in my file that could have caused problems later. Honestly worth every penny to finally get this resolved after months of stress. If you're dealing with tax questions related to medical fundraising, this service really does work.

Something to remember about medical fundraising is to KEEP ALL YOUR RECEIPTS for medical expenses! Even if the GoFundMe money itself isn't taxable, if your total medical expenses for the year exceed 7.5% of your adjusted gross income, you might be able to deduct them if you itemize deductions. This includes costs for traveling to get medical care - like gas, parking, hotels if you had to stay overnight for treatment, and meals during those trips. I learned this after my son's surgery when we had to travel out of state for treatment.

Just wanted to add my experience from last year - my mom had cancer treatment and we received about $15k from GoFundMe. I was worried about taxes too but my accountant confirmed it wasn't income. He did suggest keeping the GoFundMe money in a separate account just to make it easier to track, which might be helpful for you too if it's not too late. Also, if your daughter qualifies for any disability benefits, make sure to look into that too. We didn't realize my mom qualified for some assistance until several months into treatment.