国内的菜籽油是canola oil吗？# PennySaver - 省钱一族
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Income received through credit and debit card transactions will be reported
to the Internal Revenue Service starting in the year 2011.
Banks and merchant services will report annual gross payments processed by
credit or debit cards to the IRS and to merchants. Credit card payments will
be reported by the merchant service using Form 1099-K with copies sent to
the business and to the IRS. I suspect the reports will likely resemble the
1099 forms that report certain types of income. The law does not take effect
until January 1, 2011, so there will be plenty of time for payment
processors and business owners to prepare for this new development.
Details of Credit Card and Merchant Payment Reporting
Banks and other payment settlement services will need to report gross annual
receipts for each merchant. The income reporting will apply to "any
transaction in which a payment card is accepted as payment" (new Internal
Revenue Code section 6050W(c)(2)). Thus, banks and other financial service
providers will be reporting the total, gross amount of credit card and debit
card payments for the year for each merchant.
Exception for De Minimis Payments
No information report will be required if
a merchant's total payment transactions for the year does not exceed $20
,000, and
the total number of transactions does not exceed 200.
Planning Ahead for Credit Card Reporting
Small businesses will want to review their bookkeeping and accounting
practices. Once card payment reporting begins, business owners will need to
reconcile the information reports submitted by the banks to their own books.
Any discrepancies in reporting will need to be addressed so that accurate
tax returns can be filed with the IRS. Further details regarding credit card
and merchant account reporting are outlined in proposed regulations issued
by the Internal Revenue Service (REG-139255-08). Among other issues, the IRS
details who is responsible for reporting, how gross amounts are calculated,
and that merchant payment firms can be required to withhold funds for
backup withholding. The IRS has also released instructions for Form 1099-K.
Business owners and accountants should review this new form to familiarize
themselves with the format.
One bookkeeping issue is becoming clear. The new law requires banks to
report gross receipts. However, merchants often have chargebacks, issue
refunds, or have debit card transactions where the customer receives cash
back. Under the proposed regulations, banks and other payment transaction
services will be reporting only gross monthly and annual payments. Fees,
chargebacks, refunds and other items will not be netted against these gross
amounts for IRS reporting purposes. Accordingly, businesses should have
thorough accounting procedures to keep track of these items separately. In
other words, if you are accustomed to recording only a net deposit from a
merchant account, it would be wise to separate those net amounts into gross
receipts and the associated fees and refunds. That way your internal
financial reports can be more easily reconciled to this new Form 1099-K.
Payment Card Reporting Requires Merchant Identification
Since financial institutions will need to report credit and debit card
receipts to the IRS, merchants will need to provide their payment processor
with the full legal name of the business, their address, and taxpayer
identification number. For most businesses, this will be their Employer
Identification Number (EIN). As such, payment processors will likely request
businesses to provide them with a Form W-9 to obtain this information.
Possible Backup Withholding Issues
Merchants who fail to provide their taxpayer identification number could
become subject to backup withholding at a rate of 28% on their payments. To
prevent backup withholding, merchants should provide their card payment
services provider with the name, address, and EIN for the business.
Another concern is that credit card transactions could become subject to
backup withholding or garnishment if a business becomes delinquent on their
tax payments. Under the proposed regulations, the IRS made it clear that
backup withholding would occur on gross card payments. This could leave a
business in severe financial difficulties. Business owners who are
struggling with tax debts should work with their tax professional to develop
a repayment strategy that prevents any withholding on their card payments.
Sources:
Section 3091 of Housing Assistance Tax Act of 2008 (H.R. 3221)
Summary of the tax provisions in H.R. 3221 from the Ways and Means
Committee [pdf]
CCH Tax Briefing on the Housing Assistance Tax Act [pdf]
Information Reporting for Payments Made in Settlement of Payment Card
and Third Party Network Transactions (REG-139255-08) (pdf, 48 pages)
to the Internal Revenue Service starting in the year 2011.
Banks and merchant services will report annual gross payments processed by
credit or debit cards to the IRS and to merchants. Credit card payments will
be reported by the merchant service using Form 1099-K with copies sent to
the business and to the IRS. I suspect the reports will likely resemble the
1099 forms that report certain types of income. The law does not take effect
until January 1, 2011, so there will be plenty of time for payment
processors and business owners to prepare for this new development.
Details of Credit Card and Merchant Payment Reporting
Banks and other payment settlement services will need to report gross annual
receipts for each merchant. The income reporting will apply to "any
transaction in which a payment card is accepted as payment" (new Internal
Revenue Code section 6050W(c)(2)). Thus, banks and other financial service
providers will be reporting the total, gross amount of credit card and debit
card payments for the year for each merchant.
Exception for De Minimis Payments
No information report will be required if
a merchant's total payment transactions for the year does not exceed $20
,000, and
the total number of transactions does not exceed 200.
Planning Ahead for Credit Card Reporting
Small businesses will want to review their bookkeeping and accounting
practices. Once card payment reporting begins, business owners will need to
reconcile the information reports submitted by the banks to their own books.
Any discrepancies in reporting will need to be addressed so that accurate
tax returns can be filed with the IRS. Further details regarding credit card
and merchant account reporting are outlined in proposed regulations issued
by the Internal Revenue Service (REG-139255-08). Among other issues, the IRS
details who is responsible for reporting, how gross amounts are calculated,
and that merchant payment firms can be required to withhold funds for
backup withholding. The IRS has also released instructions for Form 1099-K.
Business owners and accountants should review this new form to familiarize
themselves with the format.
One bookkeeping issue is becoming clear. The new law requires banks to
report gross receipts. However, merchants often have chargebacks, issue
refunds, or have debit card transactions where the customer receives cash
back. Under the proposed regulations, banks and other payment transaction
services will be reporting only gross monthly and annual payments. Fees,
chargebacks, refunds and other items will not be netted against these gross
amounts for IRS reporting purposes. Accordingly, businesses should have
thorough accounting procedures to keep track of these items separately. In
other words, if you are accustomed to recording only a net deposit from a
merchant account, it would be wise to separate those net amounts into gross
receipts and the associated fees and refunds. That way your internal
financial reports can be more easily reconciled to this new Form 1099-K.
Payment Card Reporting Requires Merchant Identification
Since financial institutions will need to report credit and debit card
receipts to the IRS, merchants will need to provide their payment processor
with the full legal name of the business, their address, and taxpayer
identification number. For most businesses, this will be their Employer
Identification Number (EIN). As such, payment processors will likely request
businesses to provide them with a Form W-9 to obtain this information.
Possible Backup Withholding Issues
Merchants who fail to provide their taxpayer identification number could
become subject to backup withholding at a rate of 28% on their payments. To
prevent backup withholding, merchants should provide their card payment
services provider with the name, address, and EIN for the business.
Another concern is that credit card transactions could become subject to
backup withholding or garnishment if a business becomes delinquent on their
tax payments. Under the proposed regulations, the IRS made it clear that
backup withholding would occur on gross card payments. This could leave a
business in severe financial difficulties. Business owners who are
struggling with tax debts should work with their tax professional to develop
a repayment strategy that prevents any withholding on their card payments.
Sources:
Section 3091 of Housing Assistance Tax Act of 2008 (H.R. 3221)
Summary of the tax provisions in H.R. 3221 from the Ways and Means
Committee [pdf]
CCH Tax Briefing on the Housing Assistance Tax Act [pdf]
Information Reporting for Payments Made in Settlement of Payment Card
and Third Party Network Transactions (REG-139255-08) (pdf, 48 pages)
