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I've seen a lot of people that do this, and especially given that now SGDQ is going to be a road trip for me, I thought I'd look into it a little more.

It seems like a lot of people are using Paypal for this, but that brings up a few concerns to me. 

* Paypal seems to indicate that only legitimate charitable organizations are allowed to receive donations - is that true?  How do people get around that (in an honest way)?
* I've heard about "chargebacks" sometimes being an issue for people - what do you do about this?  Is it actually a serious problem?
* What are the tax implications of this?  I want to make sure I report everything honestly?

My goals with my stream aren't to use it as an income-generator, so please don't respond with something like "just game for fun - if you're trying to make money, you're doing it wrong."  I'll be streaming and gaming either way, and I don't have any aspirations to make anything significant out of this.  But it seems like a reasonable option that a lot of people are pursuing, and I've even had some people in my stream ask if there was any way they could make a donation. 

I'd just like to get some advice from my fellow runners who are a bit further along the road than I am.  Even if that advice is "donations are more trouble than they're worth," I'm curious.
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As for as I can tell streamers are allowed to take donations, my donation site even claims to work with Paypal if there is a charge back, so I'd say get a donation button on your channel even if you never talk about people will use it f they want to donate to you.

As for charge backs the best advice I've heard on preventing that is to let all donation money sit for 30-60 days if a charge back will be a big hit to you. That is the window most banks give for issuing a charge back so once that period is over the money should be safe for you to use.

Finally onto taxes I have no clue. Personally I would find a large channel that reads donations and takes questions like that and do an anonymous donation because you could be doing a favor to all the smaller guys watching that stream as well depending on the answer
Edit history:
Hsanrb: 2015-03-03 11:12:15 am
Chances are the money you accept through donations will eventually be hit by your countries tax assocation (US has IRS) and upon taking your paypal donations and depositing them to your bank of choice the bank will report that income to the IRS and you should be claiming that as income on your taxes. IF its under $50-100 you might be able to skirt because the income isn't going to change tax brackets, but if your a big streamer getting thousands, you should be reporting it to the IRS because eventually you will be hit by an audit.

It could skate by a little while if it sits in paypal and you manage to use paypal for bills, but eventually you will bite the bullet as paypal has to claim it somewhere in accounting records when they get an audit, which will get you in trouble and possibly audited as well. Once you use paypal you do have to attach it to a bank to pull money out so some string will tug and people using it as free money will get pulled down from their fantasy.

Edit: It might be worth noting that donations and such for non charitable streams only got big in the past 12 months, so this will be the first time the average twitch streamer will go through a tax cycle with this additional revenue stream.
Caution: This user contains Kana ^_^
Disclaimer: I'm not a lawyer or tax collector or anything to give properly backed answers. And I'm also from the other side of the pond.

But I've got a different feeling. Quite opposed to income for labour of any kind, to me this seems to be along the lines of people giving you presents because they like you. I mean, you're not giving them any benefit in return (and you're not even claiming that you are, right?).
If this assumption is correct, then at least in Germany the process would be essentially tax-free, unless you get that one big Notch donation that would be applicable to a 'Schenkungssteuer'. Not entirely sure about social security contributions; you might want to declare the donations to your medical insurance for safety, if it hits a three-digit value per month.