StinkyJournalism.org: The Unspoken Peril for "Citizen Journalists" Surprise! You Owe the IRS Some Gift Tax!
Is the “donation” of a citizen’s content (video, articles, commentaries, images) to for-profit media outlets that exceeds a fair market value of $12,000 in any single year subject to gift tax? Judging from the IRS guidelines, the answer is “yes.”
This is a surprise, and an unwelcome one.
Before people panic, however, we should keep in mind that — given the typical freelance rates paid by media outlets these days — you’d have to spend a lot of time sending stories to large media organizations before you’d be even potentially liable for gift taxes.
The good news is that it won’t affect in any way the occasional contributor, or even a frequent contributor to nonprofit or low-traffic sites, and it has no bearing whatever on your own work on your own blog, period.
More important, it’ll help get people thinking harder about financial implications in general. The business model that says “You do all the work and we’ll collect all the money” has always been a lousy one, not to mention unfair. Now, if that turns into “You do all the work, we’ll take all the money and you’ll pay taxes on what we don’t pay you,” the citizen journalists will look even harder at this unbalanced state of affairs.
(Cross-posted from the Center for Citizen Media Blog.)