fundraiser for member medical expenses

[newsboy9]

We're raising money for medical expenses of a premature baby. Any tips on how to account for this? Basically they right the checks to the church and we cut them one big check. I just don't want to do anything wrong or illegal or have the family have to pay taxes because we didn't do it the right way.

Luke

[NeilZ]

We're raising money for medical expenses of a premature baby. Any tips on how to account for this? Basically they right the checks to the church and we cut them one big check. I just don't want to do anything wrong or illegal or have the family have to pay taxes because we didn't do it the right way.

Luke

Its a pass through ..and any donations to this are NOT deductible per the IRS.

Now, to make it deductible, all donations coming in must be placed in the same pot as all other mission giving, there cannot be any sort of designation to support a single family. I would create a Contribution Fund for congregational support, and use it for ALL such donations in the future.

As far as the recipient, depending on the amount they receive, they may have to pay taxes because it is a gift and income to them. I would definitely get with a tax professional to see what the impact will be for the family.

For example, we have a Deacon's Fund that is used to provide support to members and non-members of the congregation. This fund is deductible, and the Deacon's control the dispersion of funds.

[newsboy9]

Thanks that really helps, we're not going to count it as tax deductible this time but will probably set it up as you suggested for future use.

Luke