If you accept debit and or credit card payments for your business, you should understand your annual IRS reporting requirements and obligations.
If you process gross payments that exceed $20,000, AND more than 200 such transactions you will be furnished with a 1099(k) from the payment settlement entity you used for your transactions.
What is a 1099(k)? Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance.
When should I receive a 1099(k)? You should receive Form 1099-K by January 31st if, in the prior calendar year, you received payments
Because this information is being furnished directly to the IRS by the third party network processing the transitions. It's very important that you do not under report your gross income when completing your annual income tax returns. In addition to reporting all other methods of income you also want to ensure you are accounting for any transactions included in the 1099 (k).
What if you share a credit card terminal with other individuals? If you share your credit card terminal with others, you should ensure that you are keeping accurate records of these transactions in order to account for the amounts processed as you will only receive one 1099(k) reportable under your name or your business name.
For more in-depth information I have included the link directly to the IRS website here. https://www.irs.gov/businesses/understanding-your-1099-k
If you have any questions or are unsure on how to accurately track your transactions, please feel free reach out to us here at The Arrietta Company. We are more then happy to answer any of your income tax related questions. #keepingyouinformed
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