I want a self-sufficient paid professional VPS hosing, that can live it’s own life without me.
Idea is to rent a VPS hosting, deploy my game server there and collect donations from happy players or premium shop money or money from adds directly to hosting account to pay the bills without me in the middle - this is a hobby project and I don’t need any profit from this game, just enough money to pay for hosting bills, that it.
The main Idea is that since I don’t get any money into my pocket, I should be able to escape any tax topics. In theory hosting provider should be happy to handle it, since it already has all the business assets to collect payments in place, and in theory hosting can benefit from this model a lot, because there are tone of game devs out there want to publish their small games… but I don’t see any hostings working this way…
Any help or ideas on how to stream money directly to hosting account to avoid taxes?
Maybe there are such hosting providers and I just didn’t look for them well enough, i hope?
You might want to state what country you live in, to get a more accurate answer. In the US though, I don’t think there’s a legal way to do what you’re asking. someone or something is making money from those donations, and that entity may owes tax on the money. Yes, you might write off the hosting expenses and assuming they are the same as the donations, you won’t end up paying taxes, but that doesn’t happen by just stating “trust me, taxman, I don’t make any money on this”.
The “don’t want anything to do with taxes” option it to simply accept the donations, pay the hosting service, then decide whether to declare the income to the IRS. I’m not going to express an opinion on that version as I don’t believe it’s legal (in the US).
The hosting company might want to take this on, but it would be a matter of how much money they can make off it. It will cost them some amount of money just to track donations and costs and report it to the authorities, and even if that was a net of $0, they probably aren’t in business to make a profit of $0.
The way I imagine it - the hosting company is a recipient and owner of these money strait from beginning, I only decide whether I want to rent for an extra month, or get more bandwidth/CPU/HDD or other services… but practically this money will never leave hosting company account - no refunds, and I can’t extract them to my personal banking account, so I have nothing to tell to IRS or whatever government on the planet.
I realize, these “VPS for non-profit projects” accounts should be managed a little different from regular accounts, and may require some extra work on provider’s side, but provider doesn’t lose anything: there will be a fixed price for hosting that must be paid every month, let’s say 10$/month + 1$ for being fancy, and if donations don’t cover the contract, then it is my responsibility to add enough money to cover the hosting price of cause. Getting money is my headache, taxes and hardware - is on hosting provider.
Sounds fair right?
P.S. what I call “donation” is incorrect - it’s payment for a hosting, that anyone can do. I call it so, because players should not expect anything in exchange… it’s more like crowdfunding of hosting, or so…
there is no monkey sitting there and processing my transactions for a banana - it’s done automatically for everyone on such plan. So $1 may be enough if there are thousands of devs running their projects. Are devs ready to pay extra $10/year to stay away of tax questions and focus on programming? Hell yehh!
I also didn’t say anything about promises, I want to be a regular VPS customer - first I pay for a month contract, receive VPS services for this period, deploy my game and start collecting the pot to pay for the next month. If players don’t generate enough money - I fill up the pot.
I’m not pushing provider “to trust me”, I’m pushing it to collect payments not only from me, but from any supporter of my project. In my vision - it is exactly same way of collecting money, as they all already have, they just need to expose payment form to public… does it cost $1? I think this costs close to $0 and almost zero dev effort because hosting providers don’t program those forms, they come from payment processor… Does payment processor enjoy single month payment or multiple shorties? - Shorties of cause, because they charge per transactions. It’s a triple Win-Win-Win and I should pay an extra dollar?! okay okay I can.
So I guess I have a different view of the cost. I’ve had to do taxes on income. I’ve had to create 1099 forms. I’ve had to set up bookkeeping with accounts to track income and expenses and hire someone to enter the information. I’ve written contracts with people, some of whom don’t seem to be able to uphold their end of the deal. I’ve had to sue people. And this while I’m trying to not only keep making payroll, but make a profit. I can tell you from my experience that I think it will cost more than $1/month to do what you ask. But your experience may say differently, and a hosting provider may agree with you.
I’m not inventing the wheel, it is a common practice among small business owners to have a shared account manager for a community to lower price of what you described. The point is that hosting company already has one, and there are lots of devs who can provide extra revenue for offloading bureaucracy.
I think there are three problems to solve:
when VPS customer (me) pays for a contract, it is clear who pays and who receives (owns) the VPS service. When supporters pay some portions and don’t get anything in exchange - this should be managed differently.
if host provider receives money from adds on my page and adds contract is signed with me - how that works.
if host provider receives money from in-game shop, and player receives an in-game item… also interesting combo. I guess they are non-refundable if something, but it’s unclear who owns what…
have no idea how this should be legally resolved…
Anyway the point of this topic was to ask if anyone is aware of hosting companies that already do this kind of business? cuz to me it’s kind of obvious thing that is the major barrier for many devs with cool projects…
There are various problems with this idea - contract law (if the donators are paying the hosting company directly, who owns the server?), financial concerns (what if the donations dont cover your fees for a given month? what if they exceed your lifetime of the server? what about chargebacks?), tax concerns (you are at that point receiving goods in the form of service without making a payment for them, and the donations require tax management, which requires accountants…)
To be honest, i dont think you will find many if any hosts that are going to put up with that hassle and management, and will find a lot more that do a standard billing cycle and system.
The contract is between me and host, so server belongs to me, I’m responsible to pay for every month in advance.
There should be an option to “add money to my account” through an exposed payment form, that only needs to know my contract #id and doesn’t need to know who’s credit card was used - anyone can add without expecting to get something for their support.
Here is an example: With regular hosting you can use your credit card, or your parent’s card - it already doesn’t care and accepts it, the only difference, now you don’t need to be logged-in to do that.
it is my responsibility to watch that there is enough money on my account to pay for the next month and add enough. No money = no VPS uptime.
no refunds, charge backs, if there is a million $ in the pot - fine, host owns them all and server will live forever, there is no way to extract money back. Beyond this limitation, from host’s perspective there is no difference between regular and supported account - collect money, provide service according to contract.
Oh no, I read it. It just… isnt how tax works. So it’s not a TLDR problem…
You are receiving donations for the service that YOU are paying for. Therefore, YOU are responsible for all tax implications of this process.
Yeah, but your parents still are on the hook for the contract, not the host; unless you’re of legal age to form your own contracts, in which case you’ve just commited theft and have legal implications for stealing your parents’ credit card. Again, not a responsibility the host is taking on.
No, that’s not how service contracts work. Your contract is X bucks per month for Y uptime. The host doesnt operate on a “when you can afford it” system, because they have bills to pay, and need to already know their income stream, not “if these 100 accounts decide to have enough cash in their accounts, we’ll see”.
Good luck there. The host would have to set something up like Twitch does, where you dont donate to a streamer, you buy tokens (a nonrefundable, instant-delivery purchase) which can then be given to a streamer. Is it impossible? No. Is it 10 layers of complexity that no host is going to want to implement when they can simply charge you every month for their service as per the terms of the contract? Yes.
I’m not saying it’s impossible. Just that noone is going to want to do it.
ok let’s break it down: