AuctionBytes posted an article called “IRS to Track Online Sellers’ Payment Transactions Beginning Next Year” you might want to read.
The fact that the IRS is going to be scrutinizing online payments shouldn’t come as a surprise to anyone. I’m actually surprised it hasn’t happened yet. I’d welcome being able to receive official 1099s from Paypal to assist in my annual tax preparation. The proposed new form will be called a 1099-K, Merchant Card and Third-Party Payments. You can see a sample below.
Unfortunately, for those of us managing small online businesses, this new scrutiny is only going to apply to those with sales exceeding $20k and 200 transactions.
Perhaps Paypal will give the rest of us an option to receive reporting based on this new requirement. One can hope, right?
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