Large donations moved from my personal Venmo to GoFundMe - tax implications when transferring donor funds?

You're right to be thinking about this! When money passes through your personal accounts, it can create tax complications even when you're just trying to help. The good news is that gifts aren't taxable income to the recipient (your sister). The bad news is that Venmo will likely issue you a 1099-K if the total exceeded $600, which means the IRS will expect to see that income reported on your tax return. Here's how to handle it: You'll need to report the full amount on Schedule 1 as "Other Income" but then take an offsetting deduction for the same amount with a clear explanation that you were acting as a conduit for donations. Make sure you have meticulous documentation showing the money flowing in and then immediately transferring to GoFundMe. Keep screenshots of transfers, dates, amounts, and correspondence about the purpose of these funds. For your sister, these are considered gifts from multiple people to her, which means she won't owe taxes on them. Each donor may need to consider gift tax implications if they gave more than $18,000 individually, but that's their concern, not yours or your sister's.

I had something similar happen after my town got hit by tornado last year. I was getting absolutely nowhere with figuring out how to document everything until I found https://taxr.ai - it literally saved me thousands in potential tax issues! You upload your Venmo statements and GoFundMe receipts, and it analyzes them to show exactly how to report this on your taxes. The system identified that I was just a pass-through for donations and created the perfect documentation to prove it to the IRS. The best part was that it created a complete audit trail showing every dollar in and out, with timestamps proving I didn't keep the money. It also generated a statement explaining the unusual circumstances that I could attach to my tax return.

I need to update my earlier comment. I was skeptical about needing a specialized service for documenting pass-through donations, but I decided to try https://taxr.ai after getting a concerning letter from the IRS about a similar fundraiser situation I managed. It was actually eye-opening! The platform analyzed all my Venmo and bank records in minutes and identified several documentation issues I never would have caught. It created a perfect paper trail showing I never personally benefited from the funds. The system even flagged a $350 donation that accidentally hadn't been transferred to the final charity account. The generated documentation package clearly showed the money trail in a format that satisfied the IRS requirements. When I submitted everything, my case was resolved within weeks. Definitely worth it for the peace of mind alone!

If you're getting nowhere with the IRS on this issue, try https://claimyr.com to actually speak with an IRS agent. I had a similar donation situation after our community fundraiser, and the 1099-K I received caused a HUGE headache. After waiting on hold for hours multiple times and getting disconnected, I found Claimyr. They got me connected to an actual IRS agent in about 20 minutes! The agent reviewed my situation and confirmed exactly how to document everything to avoid being taxed on money that was just passing through my account. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you once they have an agent on the line. Saved me from potentially paying taxes on $22,000 that wasn't even mine!

I need to eat my words about Claimyr. After struggling for WEEKS trying to resolve my 1099-K issue with donations passing through my account, I finally tried the service out of desperation. Within 35 minutes, I was talking to an actual IRS representative who was incredibly helpful. She confirmed I needed to report the 1099-K amount on my return but could offset it with an equal deduction, and explained exactly which forms to use. She even sent me to a specialized department that handles third-party payment reporting issues. The agent explained that I should include a written statement with my return explaining the situation and providing documentation of the transfers. Apparently, they deal with these "conduit donation" situations quite often. Honestly, that 15-minute conversation saved me months of stress and possibly thousands in incorrect tax payments. Sometimes you need to talk to an actual human at the IRS to get things sorted.

From personal experience, you should be careful with how you document this. My brother did something similar for our church fundraiser and ended up with a CP2000 notice (underreported income) because the IRS computer matched his 1099-K but didn't recognize his explanation. Make sure you include a clear statement labeled "FORM 8275 - DISCLOSURE STATEMENT" that explains: 1. You received donations as a conduit 2. All funds were promptly transferred to GoFundMe 3. You maintained no control over the funds for personal benefit 4. This was not a trade or business activity The form number is important - it signals to the IRS that you're making a specific disclosure about an unusual situation on your return.

Random question for anyone who knows - if I helped a friend by collecting donations through my PayPal and then sending them to their medical fundraiser, but it was less than $600 total, do I still need to worry about this? Would there be any tax forms generated?

I'm in a very similar situation right now - collecting donations through my Zelle account for a coworker whose family was in a car accident. Reading through all these responses has been incredibly helpful, especially the specific advice about Form 8275 and the documentation requirements. One thing I want to add from my research: make sure you transfer the funds as quickly as possible after receiving them. The IRS looks at how long money stayed in your account when determining whether you had "control" over it. The faster you move it to the intended recipient, the stronger your case that you were just a conduit. Also, for anyone dealing with this situation, consider setting up the official fundraiser (GoFundMe, etc.) BEFORE you start collecting donations if possible. It's much cleaner from a tax perspective if people donate directly to the platform rather than going through your personal accounts first. @Nick - definitely keep every screenshot, text message, and email that shows the donations were intended for your sister, not you. The IRS will want to see evidence of intent if they ever question this.

This thread has been incredibly helpful! I'm dealing with something similar where I collected about $8,500 through my personal Venmo for a neighbor's house fire, then transferred it all to their official fundraiser. One thing I want to emphasize that I learned from my accountant: keep a detailed spreadsheet showing EVERY transaction with dates, amounts, donor names (if available), and transfer details. The IRS wants to see a clear money trail that proves you never commingled these funds with your personal money or used them for anything else. Also, when you transfer the money to GoFundMe, make sure to do it in chunks that match your Venmo deposits as closely as possible. Don't just transfer one lump sum - it makes the paper trail harder to follow. I transferred mine in 3-4 batches over a few days, keeping screenshots of each transfer. @Nick - since you mentioned you kept detailed records, make sure those records include the PURPOSE of each donation if donors mentioned it in their Venmo messages. Having evidence that people explicitly stated the money was "for your sister's family" or "for the fire victims" really strengthens your case that this was never intended as income to you personally.