Keep this form handy
Depending on your type of business, you may receive a 1099-K
form in your mailbox. Don’t throw it out! Your tax professional will need it to
prepare your taxes. The Form 1099-K, Merchant Card and Third-Party Network
Payments, will arrive early in 2013, because it is due to merchants by January
31.
Merchant acquirers and third party settlement
organizations, as payment settlement entities (PSE), must report the proceeds of
payment card and third-party network transactions made to you on Form 1099-K.
You’ll receive the form if you have either accepted credit cards for payments
or received payments through a third-party network (like PayPal) that exceeded
$20,000 and the total number of such transactions exceeded 200 for the calendar
year.
Note: Starting in 2013 there will be a backup withholding
requirement similar to other 1099 forms. Merchants and third parties will be required to withhold
28 percent of gross proceeds when a tax identification number has not been
provided. Starting with the 2013 tax year, this backup withholding applies for
sellers with more than 200 transactions at any income level.
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