Business owners may receive new tax forms from credit card and online payment processors. The 1099-K is intended to keep someone from hiding income. The IRS says 53 million forms will be issued by eBay®, PayPal™, Amazon, Visa, MasterCard® and American Express®.
1099-K will show total gross revenue for the year from the payment processor. It breaks down revenue month by month. The amounts reported to the IRS are gross sales numbers with none of the expenses normally deducted taken out of the gross sales amount.
Business doesn’t pay taxes on gross income, but on net income. If June ends your fiscal year, be sure to discuss this situation with your CPA if you use payment processors. If your fiscal year ends with the calendar, you have more time.
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