[mlguenther]

I'm sorry, but you are wrong, any basic accounting knowledge (I am a CPA) will tell you that income can be recognized when EARNED, not when received. This is something the IRS agrees with.

Kickstarter funds have not been earned until the product is delivered

[lusr]

Aside from determining earned vs. received, surely the Kickstarter revenue must still be offset against expenses before tax can be calculated?

[mlguenther]

Yes, there are many ways to offset the income with expenses. Though what most Kickstarter video game devs are finding out is that they may not use all of the money as expenses in the first year. If you are accounting on a "cash" system, you would have to pay tax, if you are accounting on an "accrual" system, you would not have to pay tax until the game is released, regardless of how many expenses you have.