it is not fun and exciting . . yet it is information you need.
So ROCK ON with your day and be informed.
If your
business accepts credit cards or other forms of electronic payments such as
PayPal or eBay, big changes are in store for you. The first change that you
will notice very shortly is that you will be receiving a 1099-K from your
merchant services provider. The Housing Assistance Tax Act of 2008 requires all
businesses that process credit card and electronic payments to send a Form
1099-K to their clients with more than 200 transactions and $20,000 paid to
them. If you fail to provide your EIN to your processor they are required to impose
a 28% federal tax withholding on you.
The 1099-K requirements went into effect in the beginning of 2011 and you should receive your 1099-Ks by the end of February at the latest.
The 1099-K requirements went into effect in the beginning of 2011 and you should receive your 1099-Ks by the end of February at the latest.
There is a
new requirement that will be in place for your 2012 tax return that you must
prepare for right now. Beginning with your 2012 business
finances you
will need to separately show the amount of income you received from
credit cards (and other electronic payments) and the amount of income you
received from cash, checks and other forms of payment. You will be required to
provide this information to your CPA tax person for tax reporting purposes.
If you hire someone to do your bookkeeping for you, do not assume that they
know about this change. At this time
QuickBooks does not have an added feature to help track this new reporting
requirement and they were not even aware of it.
For now, when you process Quickbooks payments you are able to choose, cash, check and credit card as a form of payment. I want you to continue to use this feature. I will report back when Quickbooks has a solution or I have figured out temporary solution to address this issue.
Warmly - Debbie
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