New 2011 IRS form 1099-K.
By the end of Jan. 2012, both business owners and the Internal Revenue Service (IRS) will have rec tax form--1099-K--issued by credit card and online-payment processors. Form 1099-K, Merchant Third Party Network Payments, will serve to report businesses total gross aggregate reportable paym transactions for the 2011 tax calendar.
Announced in 2009, as part of the enactment of the Housing Assistance Tax Act of 2008, Form 1099 used for reporting payment card and third-party payment transactions to the IRS. Basically, credit a companies and other vendors that handle third party payments, such as Amazon, PayPal or eBay, w track the quantity and dollar amount of payments made to each client. Companies that process less transactions and $20,000 in total payments will not receive the 1099-K form as they are considered seller and will not be reported on.
As a result of this new requirement, the IRS revised the 2011 small business Schedule-C form, whic includes four new lines (1 a-e) where small businesses are asked to input: the gross merchant card an party network receipts and sales, which is the amount on the new 1099-K; any gross receipts or sale included in the 1099-K; any income reported on a W-2; and the company's total gross receipts.
It is important to note that, for tax year 2011, small businesses do not have to complete these four li instead simply put a zero (0).
Given the concerns raised by NSBA and other industry groups, this additional reporting may not be the Schedule-C moving forward. NSBA is continuing to work with IRS officials and other small-bu groups to ensure massive new burdens aren't inadvertently placed upon small businesses with regar electronic payment reporting provision.
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|Publication:||The Weekly Advocate e-Newsletter|
|Date:||Feb 2, 2012|
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