With the prominence of things like Liberapay and Patreon as well as Snowdrift.coop, I have had to look at the tax implications of them all. There is no single tax regime on this planet. Developers and other freelancers who might make use of one of these services within the F/LOSS frame of reference are frequently not within the USA frame of reference. That makes a difference.
I also have to state at the outset that this does not constitute legal advice. I am not a lawyer. I am most certainly not your lawyer. If anything these recitals are my setting out my review of all this as being “Plan B” due to continuing high tensions surrounding being a federal civil servant in the United States. With an election coming up Tuesday where one side treats it as a normal routine event while the other is regarding it as Ragnarok and is acting like humanity is about to face an imminent extinction event, changing things up in life may be worthwhile.
An instructive item to consider is Internal Revenue Service Publication 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ). The current version can be found online at https://www.irs.gov/forms-pubs/about-publication-334. Just because you receive money from people over the Internet does not necessarily mean it is free from taxation. Generally the income a developer, freelance documentation writer, or a freelancer in general might receive from a Liberapay or Snowdrift.coop appears to fall under “gross receipts”.
A recent opinion of the United States Tax Court (Felton v. Commissioner, T.C. Memo 2018-168) discusses the issue of “gift” for tax purposes rather nicely in comparison to what Liberapay mentions in its FAQ. You can find the FAQ at https://liberapay.com/about/faq. The opinion can be found at https://www.ustaxcourt.gov/ustcinop/OpinionViewer.aspx?ID=11789. After reading the discussion in Felton, I remain assured that in the United States context anything received via Liberapay would have to be treated as gross receipts in the United States. The rules are different in the European Union where Liberapay is based and that’s perfectly fine. In the end I have to answer to the tax authorities in the United States.
The good part about reporting matters on Schedule C is that it preserves participation in Social Security and allows a variety of business expenses and deductions to be taken. Regular wage-based employees pay into Social Security via the FICA tax. Self-employed persons pay into Social Security via SECA tax.
Now, there are various works I would definitely ask for support if I left government. Such includes:
Freelance documentation writing
Emergency Management/Homeland Security work under the aegis of my church
Printing & Publishing
For podcast production, general news reviews would be possible. Going into actual entertainment programming would be nice. There are ideas I’m still working out.
Printing & Publishing would involve getting small works into print on a more rapid cycle in light of an increasingly censored Internet. As the case of Gab.ai shows, you can have one of your users do something horrible but not actually do anything as a site but still have all your hosting partners withdraw service so as to knock you offline. Outside the context of the USA, total shutdowns of access to the Internet still occur from time to time in other countries.
Emergency Management comes under the helping works of the church.
As to documentation writing, I used to write documentation for Xubuntu. I want to do that again.
As to the proliferation of codes of conduct that are appearing everywhere, I can only offer the following statement:
“I am generally required to obey the United States Constitution and laws of the United States of America, the Constitution of the State of Ohio and Ohio’s laws, and the orders of any commanding officers appointed to me as a member of the unorganized militia (Ohio Revised Code 5923.01(D), Title 10 United States Code Section 246(b)(2)). Codes of Conduct adopted by projects and organizations that conflict with those legal responsibilities must either be disregarded or accommodations must otherwise be sought.”
So, that’s “Plan B”. The dollar amounts remain flexible at the moment as I’m still waiting for matters to pan out at work. If things turn sour at my job, I at least have plans to hit the ground running seeking contracts and otherwise staying afloat.