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Comment by pm215 | Hacker News Reader

One problem from the open source project side of things is that unless the project happens to be one where at least one regular contributor is a consultant who is already set up to do work-for-hire like that, it can be way too much hassle to deal with a single one-off $5K, let alone smaller amounts. There's a big chasm of "this isn't worth it administratively" before you get to "there is enough money coming in from this kind of thing that somebody could make it their job" (for instance for a developer who already has a full time job, doing work for money probably requires them to go through a lot of hassle clearing it with their employer). Some projects don't even have a setup where they could do anything useful with a donation.

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Unless one is setup as a nonprofit, in the US, there is very little difference between recieving 5000 from a donation link and recieving 5000 as a payment on an invoice. It is all taxed the same.

Some projects might not be setup for either, but it sounded to me like the above poster was dealing with some one who was willing to accept it as a donation, and it would likely have been trivial to send an invoice for 5000.

Not all open source devs are from the USA and in a lot of place outside it say the EU it can be quite the hassle. If you do it wrong it can very well be more than 5k worth of effort to fix it. When the taxman comes out 2 years later with a fine saying you didn't do X or Y.

In those countries the taxman will come out anyway because it will say that it was not a donation and you are trying to avoid paying taxes. It would be better to speak with an accountant beforehand in either case

it not about avoiding paying them (you will anyway unless you're in very narrow class of orgs) its about being in the wrong legal structure and getting stuck in administrative hell because you don't fit in their tidy little classification boxes.

Tax isn't the only issue. The parent poster already mentioned another one: employment contracts generally have some provisions against competing with your employer that require you to get clearance for other jobs. Another is a payment is never without strings attached and those strings might not be something you want to deal with unless you can live off of the project.

Well, I don't know about practices globally, but again, in the US, it is rare for a programmer to have such an employment contract. And if you did, wven volunteering on an Open Source project that competes with your employer would likely be in violation, and it would not make any difference between a "donation" and an "invoice".

I remember the first time I sold code to a company for low 4 figure amount. The hassle of registering for a VAT-Id (in Germany) and writing an invoice wasn‘t the problem. I was afraid that there were any liabilities or other „rules“ I simply didn‘t know about like „what if something breaks and they sue me, because I didn‘t include a specific line of legalese in the contract?“.

This may be terrible advice, but as a freelancer, getting sued by a company will cost them a minimum of $20k in legal fees just to get started. Unless you really messed up in bad faith, I would assume that most people will attempt to resolve things amicably.

For those of us that are used to working as contractors that isn't an issue, as we already have accountants and are used to making invoices every month. But I understand it can be daunting if you don't have all of that in place, yet.

An accountant isn’t necessary for something like this, plans like Zoho books free or harvest take care of the same things an accountant would take care of.

Parent said "accountant AND...". You need the accountant to provide advice so you don't do illegal things or run afoul of tax authorities, not to generate an invoice.

This.

Aren't there subtleties, for example, when doing inter-state commerce (assuming the two parties are both US-based)? In the EU, VAT isn't charged the same way if you invoice an entity based in your country or one based outside of it.

You can also run into the opposite problem, where they license a commercial version of a dependency, and instead of paying ten grand or whatever, they pay a senior (way over six figures) to re-implement the same functionality, which wont be maintained anywhere as well, and it takes them over a year to reach parity. Totally never happened anywhere I worked.

It astounds me that companies would rather waste hundreds of thousands of dollars instead of just throwing a few thousand that will benefit them in the long haul.

I genuinely believe more companies should adopt a policy of just letting devs work half a day on fridays on whatever they want, whether it be technical debt, or even open source projects the company depends on. Maybe that would be more feasible, but even then lots of places would still not understand the value.

It's not companies but people. I experienced both ends of the spectrum in the same company.

In my particular case it was one person vs a team of managers and directors who refused to "waste" thousands, but kept a senior engineer working on a foolish waste of time and resources, there were so many other things this engineer could have worked on instead.

In my case I think I could've made my case better but I was tired and lazy. It was me against one director where it could pay a few hundred bucks to have all the features it wanted or have me implement a single must have feature on top of the community edition.

It's difficult to judge because maybe the project had a hard budget so even if having me implement things resulted in a costlier and possibly worse result it made more sense due to not resulting in a new discretionary cost. But I think it was more due to cultural background where the person was used to not pay much for software. My experience working with CEO was the opposite, those kinds of costs were pre-approved.

Except for in-house software the company knows that they can maintain the software in the future. With external developers you might be SOL if they disappear. Dependencies are a real cost that you can't just ignore.

Yeah, there is a lot of hassle in some cases, it's really quite unfortunate that the laws don't protect individuals that want to do side work.

This must be a non-EU thing. Sometimes I'm amazed how much western democracies and esp. the EU have achieved in protecting the employee from their employer. It all seems so natural that I tend to forget how much the social democrats and worker unions struggled to get to this point.

EU is very large. If I were to believe your posts, Germany has achieved good protection of employees from their employers. Simply not true in ... many non-Germany EU countries.

I'm not sure I understand how your point relates to getting paid for side work as somebody who doesn't do that regularly.

For example, here in France, there's no such thing as "freelance". As an individual, you can't just invoice somebody. You need to set up some form of "enterprise". Sure, there are some forms which are supposed to be easier to set up, but you still have to go out of your way and do it. You can't just declare the income on your tax return. And now that you've created a company, you need to file tax returns every year, even if you don't do anything. It's also not free, an actual accountant has to sign them off (this may not be the case for the smallest forms of companies). Sending your taxes to the fiscal administration is also not free (fun fact: VAT is levied on that fee).

IANAL but that's not entirely true. As long as it's exceptional, it's legal to earn money without having a company in France. It's the "revenu commerciaux non professionnels" box on your tax form.

As for being an "auto entrepreneur" (equivalent of a sole trader), you don't need an accountant at all and the paperwork is rather small. Definitely worth it as it means you have some recurring revenue already.

According to the taxman's website [0] you need to be a "liberal enterprise". Not sure what exactly that means, but I'd be surprised there's no form of bureaucracy involved. I think you need to have at least a "micro enterprise".

> As for being an "auto entrepreneur" (equivalent of a sole trader), you don't need an accountant at all and the paperwork is rather small. Definitely worth it as it means you have some recurring revenue already.

Good to know, especially since, IIRC, they've removed the special social security you had to have for that kind of company.

[0] https://www.economie.gouv.fr/entreprises/impot-sur-revenu-bi...

> According to the taxman's website [0] you need to be a "liberal enterprise". Not sure what exactly that means, but I'd be surprised there's no form of bureaucracy involved. I think you need to have at least a "micro enterprise".

We are not referring to the same thing, I think. You're looking at the tax for corporates when I'm looking at individuals [0]. The key seems to be that it's has to be exceptional and not regular. I'd still double-check on a case by case basis with the tax bureau before going ahead, but I've found them to be helpful in the past.

It does make sense for niches like these to exist, otherwise you'd end up having to setup a legal entity before being on the receiving end of a transaction as an individual.

[0] https://www.impots.gouv.fr/sites/default/files/media/1_metie...

Yes I understand that but if you can accept donations, you can surely hack together a quote and state that the payment will go through your donation platform. In most country I believe you don't have anything to do at all bellow a certain threshold.

It's just a matter of not offering to work for free to a corporation that really doesn't need your generosity.

And sometimes a side project doesn't want to be a side hustle; dealing with payments and tax implications is time not being spent on the core project. It's an individual choice as to whether the time cost of accepting payment is worth it.

From my point of view there are two misconceptions in your post. 1) you need to be set up to work-for-hire to write an invoice. 2) you need to get clearance from their employer for things outside work hours.

ad 1) No, you don't need to. At least in Germany anybody who's legally competent can write invoices. If the invoices are secondary income, you will be taxed heavily (and declare it you must), but that's it. It has been some time since I last lived and worked in the USA, but I mean to recall that it was basically the same. Of course, invoiced money is your money now and you need to donate it to the FOSS project, which then needs some kind of treasury. But you said as much already.

ad 2) No, you don't need to. Your employer is your employer, not your owner. Now I don't know about the USA today (see above) but in European countries what you do outside working hours is your private affair -- discounting a few, very specific fringe cases. If you play soccer, dabble in explosives, or code for money doesn't matter. And frankly, your typical employer in most cases does not care anyway.

1) That may be allowed in Germany. Definitely not in Poland and many other countries.

2) In my experience, not true. Most often an employee needs to get a pre-approval that often take too long. As a full time developer, there's difference between playing soccer and developing software.

In my country a lot of people in IT are contractors (not employees) and sometimes these contracts are wild (like not working on anything else during that time and stuff like that).

That kind of clause doesn’t fly in either the UK or US, since it is disguised employment. The definition of a contractor is someone who sets their own rate and hours, and works under their own direction.

Crypto (as bad as it is) is a good way to take money. You can easily send and receive large amounts without worrying about laws and taxes. Might be unethical or illegal but just don’t get caught

getting money out or using them without KYC is not that easy

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