Online Community - What should I do?(IE: Non-Profit?)

[RivaCom]

Hi, Everyone, Hope everyone might be able to help me out.

I run a website that is basically similar to this, a forum where users can come and join in conversation with others. However, I rent some services and equipment that my users use. Currently I pay for everything out of pocket. However my concern is, I've had many users come to me asking to put a donate button on the site. This was my plan altogether as must forum software has a "subscription" option built in. However, the more I started thinking about it, the more I questioned myself.

So in a nut shell. The community runs the website/forums, rent various services, and rent various servers for our needs. That being said, I would love to eventually take additional funds and put it toward appeal, item giveaways for staff and members of the community.

Would this qualify as a non-profit organization? Should I register this as a business? Just trying to avoid any tax issues for the future. Would also be nice to keep the Community separate from my personal taxes.

[Wnhough]

Originally Posted by RivaCom

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#1;So in a nut shell. The community runs the website/forums, rent various services, and rent various servers for our needs. That being said, I would love to eventually take additional funds and put it toward appeal, item giveaways for staff and members of the community.

#2;Would this qualify as a non-profit organization? Should I register this as a business? Just trying to avoid any tax issues for the future.

#3;Would also be nice to keep the Community separate from my personal taxes.

#1;i donot think so; The procedure for qualifying for non-profit status is handled by the section 501(c)(3) of the IRS code. non-profit status is a special form of tax exemption given to certain types of organizations that do not attempt to make money for shareholders or owners, but instead uses any money raised to further a charitable cause. The IRS does not recognize individuals as non-profit entities.


#2; To qualify for non-profit status, the IRS requires incorporation of an organization. Incorporation protects individual members of a company from liability. To qualify as a non-profit organization, no individual within the organization can profit.
#3;unless you personally earn/report profit from the community on your return, correct