Business Accept Credit Card Payments?
To our Clients and Friends:
If your company has a business relationship with a “payment settlement entity” (e.g., an issuer of credit or debit cards; PayPal), you may soon be receiving something new in the mail: Federal Form 1099-K. Any payment settlement entity that processes over 200 transactions on your behalf in a calendar year that aggregates to over $20,000, must issue this form to you by January 31 of the following year. Thus, forms for 2011 must be distributed to you by January 31, 2012. The Internal Revenue Service will, of course, receive a copy.
The purpose of Form 1099-K is to enable the IRS to compare dollar amounts reported by the issuer with data reported by business entities on their annual tax returns. Thus, it will be prudent to compare the dollar amount shown on any form you may receive with your own business records to check accuracy and avoid unnecessary correspondences with the IRS.
Contact our Staten Island Office for more details.
David C Egan, CPA
Partner
718-227-6035
Monday, January 23, 2012
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