Business owners do a lot to prepare for tax time. Figuring income, deductions, and other things took the majority of the day to decipher, among other things. One thing that business owners never had to calculate is their credit card processing to the last penny. Processors have never been required to hand over their reports to the Internal Revenue Service for review.
Beginning next year, that will all change. There was a part of the Housing Assistance Tax Act that made it a requirement for processors to disclose this information. A 1099-k will allow the IRS to see your gross processing volume.
For you, this means that if you haven’t been reporting all of your credit card processing volume, the IRS will find out and you may be questioned. Play it safe and report all of your earnings!