aaryn
patreon
Taxes (Best. Post. Ever)
🕑 Added 2020-05-31 21:23:10 +0000 UTCIf y'all thought the game writing was good, wait 'til you hear me talk about taxes.
There's a summary at the bottom for those who want to skip to the bullet comments
This is the longest post ever...
Sooooo, here we go...
I dropped a post a few days ago about changes in regional tax laws that is affecting companies like Patreon. While I have to pay taxes on all contributions to the game on my end, now many areas of the world and various states within the United States are adding taxes to you, the supporter, at the time of the contribution. In the spirit of transparency, I want to fully disclose what is happening here on my end to mitigate any surprises and allow you due time to make a decision on whether this would affect your contribution amount to the game or not. There is a lot of information here but I think supporters need the opportunity to have full information related to where their donations are going if they so choose. If you're one of the ones that doesn't care about the details, you can pretty much ignore this post and assume that I got these taxable amounts as low as possible based on my own primitive knowledge. While these taxes are not insane amounts, it can quickly add up if you support multiple creators. Please remember that the world is in shambles right now and you need to take care of you. The game will always be free so please do not feel obligated to contribute or donate to the project if you're not in the financial place to do so right now.
Recap
In case you missed the first post, I want to clarify a few quick things here. Taxes are not based on my location, they're based on yours. This means that some people will be paying taxes on pledges while others will not. This has nothing to do with Patreon at all, it's based on local or national laws within your area. Taxes will not affect those in the UK, y'all been paying extra for this shit through VATS since 2015.
Patreon will be contacting all supporters on June 1 with an email of notification. I'm not sure what all it will have in it-- I'm assuming pretty much a recap of this but probably worded a lot more professionally.
To see a full list of who is affected, you can check this link and scroll down a little over halfway. This has a list of all affected countries and amounts. For those within the United States, it has a state breakdown.
My Overview of the Changes and Justification Here
So overall, the way this tax seems to work is that when you pledge an amount, the regional tax for your area is also charged by Patreon. I never see this money and it is directly sent off to wherever it's supposed to go by Patreon. One thing that I really like about Patreon is they handle a lot of the logistics for managing this stuff. Like, for example, if I had to go through and deal with all the monthly billing to supporters, it would take an unreal amount of time (or I'd just have to hire extra people just to do that). The new tax changes are no different. Essentially, I can do nothing and they will automatically make the necessary changes based on key words in the reward descriptions and apply the assumed amount of taxes to your donation automatically. Downside to this is that they will likely charge you the max amount of taxes for each tier.
One quick note: it is impossible for me to just absorb the taxes as part of your pledge and just pay it for you. This was already asked by others and something I had original considered, too. But basically, I can't just change the tier amounts and reduce them, figuring in the natural tax for the areas, and have the taxes come out of my end rather than yours. Basically, it would be impossible to start with because every regional amount is different and Patreon's system doesn't allow this.
However, for those creators who want to save their supporters the most money, Patreon has developed a tool for us to individually figure out the rewards that we give at each tier and factor that in as part of the taxes. Basically, the way this works is that the taxable amount (let's say 10% tax) is applied for 100% of a donation. But what if you have multiple rewards within that tier, all of which may or may not be taxed at a different regional rate? Essentially, this is where the tool allows us to individually select the type of reward we have for each tier and then apply a percentage of the overall pledge amount of that tier that's applicable to each individual perk. The best part about this system is that "general support" is not taxable. So essentially if the overall intent of the tier is just supporting the creator with little regard for rewards, all that shit is tax free!
So.
If we take a tier that has a few different rewards in it, we can quickly see that an overall 10% tax rate on your pledge is not going to add the full 10% to your overall Patreon bill. Here's the breakdown for one tier to show you how it works:
- A major thank you for your donation and the general support for me and the project (95%)
- Access to patron-only content including written Newsletter updates on current game progress and Dev Log diary on the process (5%)
- Private Discord channel access for Patron supporters only (0%)
Ok, so here we have the $1 tier and after each item, I've shown you the actual percentage that I've figured in for each reward. This means that 95% of that tier donation is actually not taxable because it's listed "general support" for the project. I'm able to do this because I choose to keep the game free and have always considered posts throughout the inception of this game as a donation. In many areas, even the remaining 5% and perk isn't taxable either (but this does differ by region). The private Discord is listed as 0% since there's no extra content there, it's considered a "gift" which allows me to set it at 0%.
So a couple more notes on other amounts before I list the tier breakdown.
1. Pics for $5 tier are somewhat inconsistent and some months, there is just no time for these. Therefore, that amount of tax has been adjusted to lower amounts because it has never been setup as a reward system.
2. I've also seen mixed reports for "early access" examples on taxes in Patreon examples (shown here ). So because the game is always and will always be free, I'm taking an average of those examples just to cover my ass. This is because the "early access" images are images from the game that is free and not taxable. However, some Patreon image content like the selfies and comic stuff are not included in game and are considered supplemental. However, these values are set lower on the taxes because these are not rewards, they are practice images that I use to hone my skills for the actual game. They are released as additional perks for those who choose to donate higher amounts and wish to have more access to the process of game development. So these are set as more "behind the scenes" content rather than "digital rewards" because "digital rewards" are taxed at a higher rate in many areas.
Complete Reward Tier Breakdown
Below is a list of all donation tiers. Keep in mind that some of these tiers have changed to accommodate this system and to remain more in line with the type of perks that you've seen more recently. Please go through these updated tiers and adjust your pledge amount accordingly if you need to. The perks in bold are added stuff in addition to the previous tier so you can quickly see the difference. These have also been updated on the main game page already.
Supporter ($1)
- A major thank you for your donation and the general support for me and the project (General Support, 95%)
- Access to patron-only content including written Newsletter updates on current game progress and Dev Log diary on the process (Behind the Scenes, 5%)
- Private Discord channel access for Patron supporters only (Private Community, 0%)
Member
- A major thank you for your additional donation and the general support for me and the project (General Support, 89%)
- Access to patron-only content including written Newsletter updates on current game progress and Dev Log diary on the process (Behind the Scenes, 2%)
- Private Discord channel access for Patron supporters only (Private Community, 0%)
- Occasional sneak peek pics of game version in current development (Behind the Scenes, 2%)
- Limited access to additional uncensored series and practice pics not found in game. Early game access when released. That's 3 weeks before it goes free to everyone! (Behind the Scenes, 7%)
Elite
- A major thank you for your additional donation and the general support for me and the project (General Support, 89%)
- Access to patron-only content including written Newsletter updates on current game progress and Dev Log diary on the process (Behind the Scenes, 2%)
- Private Discord channel access for Patron supporters only (Private Community, 0%)
- Occasional sneak peek pics of game version in current development. Early game access when released. That's 3 weeks before it goes free to everyone! Access to additional uncensored series and practice pics not found in game (Behind the Scenes, 9%)
Complete Nutcase
- Access to All previous rewards.
- This tier provides no extra content at this time. Some member simply asked for an easier way to donate more to support the creator (Perks mirror Elite above)
Summary
- Taxes are stupid.
- All reward tiers have been changed to reflect the changes so check to see if you need to change your donation amount
- Taxed amounts are based on region and I have made adjustments to each tier in an attempt to be fair and legal but still attempt to save those affected as much money as possible. Rather than being taxed the full amount, different perks have different taxable amounts so you should only get charged a percentage of the actual tax amount. This means that "general support" donation amounts remain the overwhelming majority of the intent behind patron support because the game was established as being funded solely by donation and "general support" is not taxable (Most reward tiers list "general support as around 90% of the purpose of the tier, making 90% of your donation not taxable). Other rewards, due to their inconsistent nature are considered "practice" for the real game and are taxed at the rate of "behind the scenes" content (which is typically lower amount than more professional "digital content").
- Taxes are stupid
If you have questions, let me know. I tried to make this as detailed as possible to really give you a solid breakdown on my thought process and why those amounts are the amounts that they are. If something looks crazy to you, call me out on it. I can always change these. Keep in mind, changes do not take effect until July 1.
Love you guys and your continued support is insane to me. Thank you from the bottom of my heart-- the government can't tax that shit.
Please stay safe out there, tell someone that's important to you that you love them, and do something nice for somebody.
<3
-Aaryn
Comments
Aaryn
Lmfao, well if the left ventricle is tax free in your area, that's def where its coming from for you 😉
Aaryn
Haha, this made me laugh
Alan Song
Thank you for your clarification. I might move to Alaska digitally. I have heard the summer up there is very cool and refreshing.
