uncle-sam-wants-you-to-refinanceArt & Money Matters Mondays:  Have you heard of IRC Section 6050W of the tax code?  Maybe or maybe not…I mean the only people who probably really read or even understand any part of these ever changing tax laws are lawyers and tax accountants. Right???

But when it affects your business or basically changes the way business is being done, take note and find a legal person or tax advisor to break it down in layman’s terms!

If you’re a business owner, receiving payments online and using a US payment processor like Paypal or Amex merchant services, LISTEN UP

The IRC Section 6050W states that all US payment processors or payment settlement entities, like Paypal, are required by the IRS to provide information to the IRS about certain customers who receive payments for the sale of goods or services through the processors.  The threshold is based on dollar volume and number of transactions. So if you are a sole proprietor or registered business, processing payments through Paypal, for example, and fall under the IRS criteria, Paypal will request you to update your account with a tax ID number and at the beginning of the calendar year, will send you a Form 1099-K. Simultaneously Paypal is required to report your total gross sales, received via Paypal, to the IRS.  Click here for answers Paypal prepared to FAQ’s from customers on this issue.  Did you get all of that?

The Bottom Line:  The IRS will hold you accountable for reporting your sales and income and Uncle Sam will get his due!  

Have a great week!
Sincerely your fellow Creative Entrepreneur, T.T.