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JerrySJD
JerrySJD, Attorney
Category: Business Law
Satisfied Customers: 821
Experience:  Attorney for business formation, business sales, tax, partnerships, sole proprietors and buy/sell agreements.
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I have read that the IRS is going to start requiring credit

Resolved Question:

I have read that the IRS is going to start requiring credit card companies to send out 1099's reporting how much money was earned using credit card payments. We are a small LLC who run estate sales earning on a commission basis. We use the Intuit Go Payment portable phone payment system. My concern is that the money we get through credit card payments is not all profit to us. We only get a percentage. How will this new requirement effect us? Currently I keep detailed records as to how much of a commission we charge, but how can I report this?
Submitted: 4 years ago.
Category: Business Law
Expert:  JerrySJD replied 4 years ago.

This is true. However, if you only get a percentage of the amount passing through, then you should be fine as long as you have records. It is your account statements that will mean the most. For example, if you receive $100 and send on $70, then you only keep $30. That means you report $30. Since you are getting the money and then passing it on to a third party, the portion you pass on looks like a deduction, rather than a typical pass through. You can write off the part you send on and that will be consistent with your account statement. If this is possible for you logistically, then you should do it that way. So you would have, in the example above, income of $100 and expense of $70, leaving a net of $30 which is correct.

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