Wouldn't it be nice if tax laws didn't change? But alas-they do! As a business bringing in income and paying monies out, it is important for you to stay aware of any tax law changes. This is why eFileMyForms supplies this library of helpful articles. Of course there's much more information online, and you can always visit the IRS.gov website for complete information.
Regarding the 1099 form, there have been a couple of updates this year.
First, there is a new Form 1099-K, with some new requirements. Along with the Internet comes opportunities for income that isn't being counted or regulated. An example would be somebody selling items on eBay and not reporting the income. The IRS has made an attempt to capture unreported income by requiring individuals and businesses to report merchant card and third-party payments. So for example, if your business is paying a contractor using a PayPal account, they and you should be reporting those payments.
The good news is that the form 1099K is not required if the person making the income has gross sales under $20,000 a year or less than 200 transactions per year.
The bottom line-online income is income, and Uncle Sam wants his share. Even if you're not bringing in $20,000 a year as a seller, you still want to be sure to pay taxes accurately on what you do bring in.
And if your company is paying vendors through PayPal, or other online payment methods, remember that the IRS is looking at these payments and will expect you to report large amounts. This new form can be viewed at IRS.gov and can be filed easily and quickly using eFileMyForms.