As we watch the first month of 2011 come to an end- it is important to remember that this New Year ushers in a new era regarding credit card payments and reporting to the IRS. The following is an overview of the IRS merchant transaction reporting requirements statute, which was added in November of 2009 to the Housing Assistance Tax Act of 2008:
(It is important to note that NO IMMEDIATE ACTION IS NECESSARY ON THE PART OF OUR MERCHANTS or OUR REFERRAL PARTNERS)
Beginning in 2011, our processing companies will be required to calculate & track the gross amount of reportable payment card transactions. They will also be required to report the correct legal name, Tax Payer Identification Number and address of all merchants processing with TMC. It is imperative that the information we have on record is accurate, as the IRS backup withholding rules will be applied to this statute. This means that our processors will be required to withhold Federal Income Tax (currently 28%) if any pertinent information is missing or if there are any discrepancies with Federal Tax ID or Social Security numbers. At the end of the year we will be working with the processing companies to insure that you receive form 1099-K no later than the last business day of January 2012. The 1099-K is the new form designed to keep track of your credit card processing volume for the IRS. (for more info visit http://www.irs.gov/irs/article/0,,id=215740,00.html )
As a small business owner this new legislation DOES have an upside! You no longer have to walk through 12 months of processing statements or online reporting to know how much you processed in credit card volume! When we originally approved your merchant account, we verified your identifying numbers so unless there have been changes, you do not need to worry. You just need to be aware that you will be expecting a new form to use with your taxes. If you have changed the organization of your company since you began using our services or if you would like to verify that the information we have on file is correct- please email our team and we will touch bases with you to make sure that we do not run into any withholding issues at the end of the year! Service@TotalMerchantConcepts.com
Have a great first week of February and let us know if we can be of service! Cheri
Cheri Perry
Sunday, January 30, 2011
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