<prompt> Human: I am planning on starting a Minecraft server and I want to do it right. I plan to collect donations from users and publicly announcing to other players that they donated. That is the only thing I plan on giving players in return for donating. I am not selling them any services as the server will be free to play no matter a players donating status.I plan to use the donations received to pay server bills and nothing else. If the server does shutdown after awhile then I will keep any left over money. How do I handle these donations and taxes? Are there any permits I will need to apply for?What do I need to implement to cover my ass? I know I need to create a Terms of Service stating that people under 18 must have parental permission to donate, services are not guaranteed and that donating will not be rewarded other than a special nametag indicating you are a donator. I figured should also put in there a that donations will be used to pay bills unless server service is halted.Some Details:In The US SC to be exact Plan on Using PayPal for donations Not interested in starting a business Before you ask: Yes, I am over 18 I hope this post belongs in this subreddit.  <response>: There would be 2 ways to consider this activity, as a business or as a hobby. You are stating that you dont think youll make a profit, you arent in it to make a profit, youre not really going to attempt to make a profit. That definitely sounds like a hobby to me. The good news is net income from hobbies is not subject to self-employment taxes. The bad news is if you make a profit for more than 3 years out of 5, the IRS is going to consider it a business and subject you to SE taxes.Heres the IRS site for more info regarding how to report your hobby activities. 