I spent many hours and many emails with a good accountant, and he advised me not to launch a Kickstarter late in the year! However, there was no better time, and I had to work around the cash-flow issue, as I describe.

The state taxation issue was my fault. I had, in fact, budgeted to spend *more* on tax than I actually owed. So I wouldn't have come up short. Based on my communication with the state, I expect that I would pay different rates on parts of the Kickstarter, and potentially pay up to about 5% to the state in tax. In the actual event, it was about 1.5%.

However, I should have better understand the issue of destination addresses so that I had properly collected that information from everyone. That's something that I've now heard from many other crowdfunding projects about, too.

Further, at least Washington State requires you pay in-state retail business and occupation tax plus sales tax on all sales for which you cannot account for the destination. That can be a huge tax bill.

Thanks, much! Really, I wrote the article in part as a public service, not to be full of myself, because so many people I know have these questions. I have some answers, lots of questions, and lots of places to point people for planning. The commenters here can be awful at times (some are great, thanks!), but they're dwarfed by the number of people who are reading the article.

"aaaaand I'm guessing your compensation is at least partially based on clicks.": Our compensation is based on producing new content that people want to read; clickbait doesn't get us anywhere, because it doesn't turn into people reading the articles, but clicking and leaving. It also earns us anger, which doesn't help foster regular readers. Also, a 4,000-word article about tax issues is usually *not* traditional clickbait under any reasonable definition...

"That's nice, but you're not a lawyer or a tax attorney so my advice is to stop pretending like you are one before someone in a position of authority takes notice."

I love how people who didn't read the article out themselves so clearly!

Absolutely correct in one regard, but some very large business also run on cash if don't make stuff that's inventoried.

I did research it (and mention it in the article) and discuss it with my accountant. Because the publication doesn't really qualify for accrual accounting, it would have invited scrutiny (or worse) had I switched to accrual to get advantageous accounting rules for a specific project.

I researched this and discussed it with my accountant. My accountant said that switching cash-basis business to accrual for the sole purpose of deferring taxes for something that isn't part of its routine business could be met with scrutiny and penalties —and be disallowed.

And the IRS rules make it clear that you can't simply align revenue and expenses. It has a number of examples in which it's clear that in a Kickstarter, the revenue couldn't all be deferred, although the expenses might be allowed to be taken in 2013 if contracts were signed and other tests made.

Thanks, TheGavster! For me, I had sufficient cash flow and overall income from the main business relative to the size of the Kickstarter that we could have weathered it if we hadn't had a perfect alignment as we did.

I don't mean to sound totally hapless. I had put a reserve of cash away for taxes and estimated *too high* for the state taxes as it turned out. But I didn't plan as thoroughly as I should have, and I have seen this bite a lot of other people I know, too.

It's more like the lottery.

If it's interesting and useful, and I submit it under my name, and it gets posted to the home page by people with full awareness, it seems like you're engaging in meta-moderation within a thread.

I don't post B.S. to Slashdot; I've been using it since it started (not under this ID at the very beginning). The moderators and other tools prevent useless stuff from rising to the top.

So.

I completely understand that! But it's difficult to say "clickbait" if you haven't visited the site.

Medium is no panacea, and this is a period when they're spending money to figure stuff out before they plug in a revenue pipe (see public statements by Ev Williams). However, you're seeing a ton of links to Medium because it's got a great front-end for writing and publishing. I've been working with Web-based content-management systems (CMSes) and sadly wrote a few myself for nearly 18 years, since the first formal ones arose. And Medium is pretty fantastic for writers and publishers.

I think it's very good for readers, because it doesn't have cruft. It's words, no ads, photos/video well presented. So people have raced to write there if they don't want to use blogging software because it's just the story.

Yes, there are a lot of SEO marketing types writing stuff at Medium. But there's a lot of good work (not tooting my own horn as I'm about 0.001% of the content of Medium) that's there, too.

It's difficult to claim "clickbait" when there are no ads!

I wrote the article in this link, and edit a publication called The Magazine. Medium pays us to write new content and post archived material from our publication to their site while they learn about what people read. They're looking at a lot of data (which anyone who uses the site, even as a blog platform, can see in the stats page) to figure out whether people read entire articles, etc.

I wrote 4,000 words from months of dealing with tax and business issues related to Kickstarter. I didn't realize that would be considered *thrilling clickbait headlines*. Instead, I though Slashdot readers, among others, would be a likely audience working in and around crowdfunding, and might like to get some information before launching one about the tax and accounting side of things.

The "multiuser blog" is a collection of related articles, some of them run by publications like mine.