If you accept credit cards in your business, you'll likely be receiving a 1099-K. These are 1099s from your payment processors like Stripe, PayPal, Venmo, etc.
There are some nuances to pay attention to here. The number on the 1099 they send will likely be the gross amount you sold through their service. But you get charged a processing fee right? What you need to do is report the full amount on the 1099-K and then deduct the processing fee as an expense.
Note: This episode was recorded prior to an announcement by the IRS that they would not be making this change to lower the 1099-K reporting threshold to $600 from $20,000. For 2022 reporting, the threshold remains at $20,000.
* Related episodes:
160. How to Manage a Business with Multiple Owners with Jeremy Wells, CPA, EA
183. Is it Too Late to Elect the S Corp?
190. Live Q&A: Deducting Startup Costs in a New Business
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.