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There's a couple threads on 1099k but this one is different as it's only to list payment processors who are reporting amounts LESS than the $20k/200 transaction requirement.

This will serve as a "heads up" list so people know which processors to stay away from if they Want to avoid a 1099k

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One question here about the 200k/200 limilts.
Say I made 100k/100 with paypal and 100k/100 with Amazon payments. Combin... (more)

Mowshang (Apr. 15, 2012 @ 8:05a) |

Yes paypal and Amazon along with venmo, intuit, square, and all the other payment processors submit to each other a list... (more)

emgeecee (Apr. 15, 2012 @ 12:13p) |

"a hydrogen-fired boiler for supplying supplementary heat; and an injection manifold for metering controlled amounts of ... (more)

Chyvan (Apr. 15, 2012 @ 12:35p) |

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Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k

SUCKISSTAPLES said:   Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k

And on top of it, it does hard pull when opening the account.

Was just about to start the thread... except my title would have been idiots who issued 1099.

intuit for $x.xx. Seriously!!!

starcrossed said:   Was just about to start the thread... except my title would have been idiots who issued 1099.

intuit for $x.xx. Seriously!!!
That would be an incredibly long thread. I think 1099K does center it a bit. (Only a handful of merchant processors vs the millions who can issue a 1099)

Since intuit gopayment is attempting to compete with square, if you are paying friends back and such with it(which is what I've been using it for), what on earth do you do with a 1099, just say you're paying friends, I'd almost rather pay the tax than deal with that headache. I thought I was doing everyone a favor saving 0.05 percent for everyone by not using square.

Does paypal report 1099K if one doesn't hit the limit?

http://www.ourtaxingtimes.com/2011/11/actually-reporting-1099k-i...

charges are less than the $20,000 /200 transactions requirement so I may not receive a 1099K.

CHANGE - This minimum only applies to third party payers like PayPal. Merchant card processers will issue 1099Ks for any charges or debits.

Has anyone received a 1099 for venmo, or square?

Just got one from Costco for less than those limits.

Given that several Wachovia Bank employees have been indicted for aiding and abetting a money laundering scheme using credit card transfers, I would expect credit card processors to err on the side of caution. Remember every tax cheat/money laundering outfit is going to be looking for someone who doesn't report. So not reporting will be the express lane for attracting attention by the IRS. Given that it costs credit card processors the same amount of money to issue a 1099 as to send you a monthly statement, That is about 50 cents. Incredibly cheap! peace of mind given the focus on money laundering by IRS. I am surprised that I haven't received a1099 from eBay/Paypal for the four items I sold last year.Only excuse I can thi9nk of is that it was less than $600. That is a different cutoff for 1099 misc which also applies.

Fair enough, and actually since some don't mail the 1099, it costs them almost nothing to produce it. But the question remains that some of these payment processors are marketing themselves as payment methods for splitting bills among roommates, ex. intuit gopayment, square. This is not earned income subject to taxes when I get 50 bucks for splitting utilities. However, it's not worth the tax fight. I would just prefer that they said they would say upfront they will issue a 1099. At least the various bank bonuses all say in the fine print they will issue a 1099 so you can utilize that fact in your decision to pursue.

So far...

American Express, Travel Realted Service
EVO Merchant Services LLC(app ninja) - just set it up and oly processed $6.00 in test transactions in 12/11

emgeecee said:   Has anyone received a 1099 for venmo, or square? According to this Square-Up Link they do not unless you exceed $20K/200.

Also important, it's $20K/200 PAYPAL transactions, not eBay. That almost got me (basically had to kill all my eBay listings 3 months early).

MisterEd said:   emgeecee said:   Has anyone received a 1099 for venmo, or square? According to this Square-Up Link they do not unless you exceed $20K/200.

If intuit's gopayment's goal, or one of them, is to compete with square, giving a 1099 for tiny amounts paying people back seems incredibly short sighted. I actually wouldn't have known about intuit's 1099 if not for this thread, they sent me no email or mailing. Only after this thread did I look for it on my online account(not even an alert when I login). Sorry for the rant.

nsdp said:   Given that several Wachovia Bank employees have been indicted for aiding and abetting a money laundering scheme using credit card transfers, I would expect credit card processors to err on the side of caution. Remember every tax cheat/money laundering outfit is going to be looking for someone who doesn't report. So not reporting will be the express lane for attracting attention by the IRS. Given that it costs credit card processors the same amount of money to issue a 1099 as to send you a monthly statement, That is about 50 cents. Incredibly cheap! peace of mind given the focus on money laundering by IRS. I am surprised that I haven't received a1099 from eBay/Paypal for the four items I sold last year.Only excuse I can thi9nk of is that it was less than $600. That is a different cutoff for 1099 misc which also applies.

As soon as tales of audits emerge from paying friends back for dinner or selling an old wardrobe on eBay, people will start to grow tired of the frustration and risk. Reporting amounts below the limit, which are likely to be casual non-income, is only detrimental to long term adoption of the service.

Throwing clients to the gator pit at the IRS is bad for business.

The money launderers need a lot higher volume than what falls under the de minimis non-reporting threshold. Wachovia got busted for turning a blind eye to billions in cartel profits moved across borders. Equating that with dinner check splitting is silly hyperbole.

The problem is that for example in 2006 about $450 billion in taxes went unpaid. (17% noncompliance factor) http://www.cbsnews.com/8301-201_162-57354324/govt-owed-%24450b-i... IRS audits recovered $55 billion leaving $385 billion uncollected. Budget deficit was $246billion. That means every man woman and child could have gotten an extra $500 back on their tax return and we would have had a balanced budget. I suppose you are against a balanced budget because it inconveniences you and you don't want the $500 rebate either because of the extra work. AS they say you have to spend money to make money. I personally would like for them to plug the holes on the cheats and cut taxes for the rest of us. The only people I can think of who would be against that are the cheats. Virtually all of the federal debt represents taxes uncollected because of tax cheats. Tax cheats don't just cheat the government they cheat all of the honest hard working people who pay their taxes as well. Whose side are you on svr411?!

nsdp said:   AS they say you have to spend money to make money. I personally would like for them to plug the holes on the cheats.
Me too. But lets start with billionaires that have an effective 14% tax rate instead of the college kids trying to make a few extra bucks by selling Playstations and video games.

If a company states it won't send a 1099-K unless you hit the 20k/200 mark, then it better damn well not send one if you're under the line.

Awesome thread SIS. Hope it gets stickied.

nsdp said:   The problem is that for example in 2006 about $450 billion in taxes went unpaid. (17% noncompliance factor) http://www.cbsnews.com/8301-201_162-57354324/govt-owed-%24450b-i... IRS audits recovered $55 billion leaving $385 billion uncollected. Budget deficit was $246billion. That means every man woman and child could have gotten an extra $500 back on their tax return and we would have had a balanced budget. I suppose you are against a balanced budget because it inconveniences you and you don't want the $500 rebate either because of the extra work. AS they say you have to spend money to make money. I personally would like for them to plug the holes on the cheats and cut taxes for the rest of us. The only people I can think of who would be against that are the cheats. Virtually all of the federal debt represents taxes uncollected because of tax cheats. Tax cheats don't just cheat the government they cheat all of the honest hard working people who pay their taxes as well. Whose side are you on svr411?!

False dichotomy.

We can have an efficient tax system without brutalizing people with audits, which might be possible if we got rid of the lawyers and their damn eight million word tax code.

A taxpayer loses time and money as soon as he receives the audit notice, assuming that taxpayer isn't Treasury Secretary Turbo Tim Geithner. He loses even more if it finds anything.

The expense, hassle, and stress of an audit is nerveracking, even more so because the IRS is populated by unaccountable bureaucrats and gangsters.

You've been a consistent apologist for lawyers, accountants, bureaucrats, and other rent-seeking leeches, so I'm not going to bother to respond any further than to say you don't live in the same world as the rest of us who create things for a living. Your kind has made too much money burdening the rest of us with nonsensical work and cost to ever understand what goes into the silly compliance challenges you create from nothing.

FootInMouth said:   

If a company states it won't send a 1099-K unless you hit the 20k/200 mark, then it better damn well not send one if you're under the line.

Awesome thread SIS. Hope it gets stickied.

No company has said it won't send a 1099k

All we know for certain is that if you did more than 200 transactions AND $20k volume your processor is absolutely required to send 1099k. They have no discretion in the matter

But For amounts below those thresholds It's not required, but voluntary and up to the processor discretion .

SUCKISSTAPLES said:   Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k


I just received one too for $1,400. So, the big question is now what to do with it/how to report it on income taxes. Any thoughts?

qwerty12345otron said:   SUCKISSTAPLES said:   Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k


I just received one too for $1,400. So, the big question is now what to do with it/how to report it on income taxes. Any thoughts?


It would depend on what that $1,400 was for.

jetsfan92588 said:   qwerty12345otron said:   SUCKISSTAPLES said:   Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k


I just received one too for $1,400. So, the big question is now what to do with it/how to report it on income taxes. Any thoughts?


It would depend on what that $1,400 was for.

Churn

qwerty12345otron said:   SUCKISSTAPLES said:   Datapoint: innovative merchant solutions llc
(intuit go payment merchant account)

I just received a 1099k for under 10 total transactions and under $200 total volume!!!

Stay away from intuit gopayment if you are below the reporting thresholds and want to avoid 1099k


I just received one too for $1,400. So, the big question is now what to do with it/how to report it on income taxes. Any thoughts?

The 1099-K requirement has been deferred for reporting this year:

http://www.irs.gov/instructions/i1065/ch02.html#d0e2526

Line 1a. Merchant card and third-party payments (including amounts reported on Form(s) 1099-K)

For the 2011 tax year, the IRS has deferred the requirement to separately report on your return the amount of merchant card and third-party network payments received. Therefore, enter zero (-0-) on line 1a.

Received a 1099k from Elavon (Costco's Merchant System) for a measly 5500 dollars.

Got one from Intuit for Jan-June transactions. Then I switched to Merchant Focus.
Got one from EVO Merchant Services for July-Dec Transactions. Are they a parent company for Merchant Focus? I don't recall even hearing of them, although the name may be on some paperwork from Merchant Focus (I'm too lazy to dig it out). The totals are correct so I'm assuming it's something like that.
So far nothing from PayPal or Amazon.

I didn't do over 200 trans. or $20,000 with any of these individual companies for 2011.

qwerty12345otron said:   Churn

I bet you're fine if you can prove it was for churning. If you used your own credit card, that's probably pretty easy; if you were using gift cards, you may have to be able to provide evidence that the gift cards were yours to begin with.

ETA: make sure you get that evidence ready and keep it with your return, but don't send anything extra to the IRS or report that as income anywhere. If they want to know what the deal with that is, they'll contact you.

However, if the IRS does ask you for an explanation, they may want to know why you were doing the "churning" and they may claim that whatever income you got from the churning should have been claimed on your tax return.

jetsfan92588 said:   qwerty12345otron said:   ChurnHowever, if the IRS does ask you for an explanation, they may want to know why you were doing the "churning" and they may claim that whatever income you got from the churning should have been claimed on your tax return.I thought rewards were considered to be rebates... http://www.irs.gov/pub/irs-wd/0228001.pdf
IRS said: 4. Does Taxpayer realize income from participation in the program?
4. The rebates are not includible in Taxpayer’s gross income, whether they are donated to charity or retained personally.
And here's one that specifically targets frequent flier miles: http://www.irs.gov/pub/irs-irbs/irb02-10.pdf
IRS said: The IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travelIt would be silly if they said, yes, FFM and "other in-kind promotional benefits" attributed to travel are non-taxable, but if you get them by purchasing an inordinate amount of Cadbury eggs, you'll be hearing from us.

SUCKISSTAPLES said:   FootInMouth said:   If a company states it won't send a 1099-K unless you hit the 20k/200 mark, then it better damn well not send one if you're under the line.
No company has said it won't send a 1099k

AmazonPayments has:
https://payments.amazon.com/sdui/sdui/helpTab/Amazon-Flexible-Pa...

"Will you file Form 1099-K for my account if I only exceed one of the two thresholds?

No. Unless you exceed both thresholds ($20,000 in gross payment volume and 200 transactions) we will not file Form 1099-K for you."

Good to know!

ajh5408 said:   jetsfan92588 said:   qwerty12345otron said:   ChurnHowever, if the IRS does ask you for an explanation, they may want to know why you were doing the "churning" and they may claim that whatever income you got from the churning should have been claimed on your tax return.I thought rewards were considered to be rebates... http://www.irs.gov/pub/irs-wd/0228001.pdf
IRS said: 4. Does Taxpayer realize income from participation in the program?
4. The rebates are not includible in Taxpayer’s gross income, whether they are donated to charity or retained personally.
And here's one that specifically targets frequent flier miles: http://www.irs.gov/pub/irs-irbs/irb02-10.pdf
IRS said: The IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travelIt would be silly if they said, yes, FFM and "other in-kind promotional benefits" attributed to travel are non-taxable, but if you get them by purchasing an inordinate amount of Cadbury eggs, you'll be hearing from us.


When you buy something with a rebate or a CashBack cc, it's lowering the cost basis . If you never resell the item it's just a discount off the purchase price

But if you resell the product you are supposed to use the reduced cost basis of the cc rebate. Buy a wudget for $100 with a 5% card, sell it for $120. Your cost basis is $95 and income is $25

Churn is essentially buying cash equivalents below face value and receiving face value. The IRS would have no hesitation classifying that as income.

Don't be the test case

jetsfan92588 said:   qwerty12345otron said:   Churn

I bet you're fine if you can prove it was for churning. If you used your own credit card, that's probably pretty easy; if you were using gift cards, you may have to be able to provide evidence that the gift cards were yours to begin with.

ETA: make sure you get that evidence ready and keep it with your return, but don't send anything extra to the IRS or report that as income anywhere. If they want to know what the deal with that is, they'll contact you.

However, if the IRS does ask you for an explanation, they may want to know why you were doing the "churning" and they may claim that whatever income you got from the churning should have been claimed on your tax return.

I needed some extra cash (i.e. cash advance) to pay bills.

ajh5408 said:   jetsfan92588 said:   qwerty12345otron said:   ChurnHowever, if the IRS does ask you for an explanation, they may want to know why you were doing the "churning" and they may claim that whatever income you got from the churning should have been claimed on your tax return.I thought rewards were considered to be rebates... http://www.irs.gov/pub/irs-wd/0228001.pdf
IRS said: 4. Does Taxpayer realize income from participation in the program?
4. The rebates are not includible in Taxpayer’s gross income, whether they are donated to charity or retained personally.
And here's one that specifically targets frequent flier miles: http://www.irs.gov/pub/irs-irbs/irb02-10.pdf
IRS said: The IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt or personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travelIt would be silly if they said, yes, FFM and "other in-kind promotional benefits" attributed to travel are non-taxable, but if you get them by purchasing an inordinate amount of Cadbury eggs, you'll be hearing from us.


My understanding of "churning" in this instance would be using your own credit card to pay yourself (getting cash). Because there are no goods or services exchanged, a "rebate"/lowering basis argument probably wouldn't hold up.

I didn't look at the bulletin, but the PLR applies to a specific circumstance that is not the case here. This statement: "a percentage of the price of an item (less an administration
fee) purchased with a Company card at a participating merchant" defining a "rebate" in the PLR request is not the same when an individual is involved in "churning".

jetsfan92588 said:   My understanding of "churning" in this instance would be using your own credit card to pay yourself (getting cash). Because there are no goods or services exchanged, a "rebate"/lowering basis argument probably wouldn't hold up.As SIS pointed out, if you call it a reduction in basis and assume points/miles/DD have value equal to their cash redemption rate, you would owe taxes on the total rewards volume if you were buying dollar-for-dollar cash equivalents without fees. For example, if you churned 5% on AARP, your cost of goods would be $95,000 on a total revenue of $100,000, even if the "goods" are fee-free credit-to-cash transactions, meaning you'd owe taxes on $5,000 net profit. That's my understanding, anyway, and I could very well be wrong...

I don't necessarily agree with that, not because it's not logical (it is), but because I haven't seen the IRS documentation which states it to be true.

I think that's how the IRS would view it. Obviously I don't know either way and I wouldn't be totally surprised if the IRS didn't consider that 5k income, although my guess is that if you thought it wasn't income and wanted to argue that, you would have to get all the way to tax court.

I think the problem arises elsewhere as well if you don't consider the rebate to be a reduction in cost basis. For example, if you are somehow able to use a CC and buy something to get 5% rewards and then return that item without losing the rewards, that difference would definitely be considered income. The way I see it is that everything is income and taxable unless you can prove that it's not.

I am always open to changing my viewpoints though, especially related to unresolved tax issues. I don't think the IRS has published anything about it yet because it was an issue that never really came up. Although, with these new reporting requirements it is quite possible that we'll have an answer in the next several years.

svr411 said:   nsdp said:   The problem is that for example in 2006 about $450 billion in taxes went unpaid. (17% noncompliance factor) http://www.cbsnews.com/8301-201_162-57354324/govt-owed-%24450b-i... IRS audits recovered $55 billion leaving $385 billion uncollected. Budget deficit was $246billion. That means every man woman and child could have gotten an extra $500 back on their tax return and we would have had a balanced budget. I suppose you are against a balanced budget because it inconveniences you and you don't want the $500 rebate either because of the extra work. AS they say you have to spend money to make money. I personally would like for them to plug the holes on the cheats and cut taxes for the rest of us. The only people I can think of who would be against that are the cheats. Virtually all of the federal debt represents taxes uncollected because of tax cheats. Tax cheats don't just cheat the government they cheat all of the honest hard working people who pay their taxes as well. Whose side are you on svr411?!

False dichotomy.

We can have an efficient tax system without brutalizing people with audits, which might be possible if we got rid of the lawyers and their damn eight million word tax code.

A taxpayer loses time and money as soon as he receives the audit notice, assuming that taxpayer isn't Treasury Secretary Turbo Tim Geithner. He loses even more if it finds anything.

The expense, hassle, and stress of an audit is nerveracking, even more so because the IRS is populated by unaccountable bureaucrats and gangsters.

You've been a consistent apologist for lawyers, accountants, bureaucrats, and other rent-seeking leeches, so I'm not going to bother to respond any further than to say you don't live in the same world as the rest of us who create things for a living. Your kind has made too much money burdening the rest of us with nonsensical work and cost to ever understand what goes into the silly compliance challenges you create from nothing.


Too bad srv411 you are the type who jumps to conclusions with out enough information to know that he doesn't know what he is talking about. Dunning Kruger Syndrome I believe it is called. http://opinionator.blogs.nytimes.com/2010/06/20/the-anosognosics...

"You've been a consistent apologist for lawyers, accountants, bureaucrats, and other rent-seeking leeches, so I'm not going to bother to respond any further than to say you don't live in the same world as the rest of us who create things for a living. "

Tell me have you ever accomplished or created anything like this. I am one of the co inventors. http://www.wipo.int/patentscope/search/en/detail.jsf?docId=WO201...

I can walk and chew gum at the same time. I am also pretty good at electrical engineering as well as law and I am also a certified fraud examiner. Obviously more talent than you have in creating things. But you obviously haven't had time to make these accomplishments.

You probably don't want the IRS digging into your financial life, even if you are saintly clean. The 1099K in and of itself may not trigger an audit, but once an audit is triggered, how would you defend against it? Tell them you charge your own credit card? They ask you why? You tell them, to get cash advance? Cash advance of $100k or even $1M, on a card with a $20k limit? Hmmm...If you were the investigative agent, would your antenna perk up? Then they go back 3-5 years on past tax returns. They start looking into your wife, too, if she files jointly See where this is going? The game gets riskier when you have to deal with the IRS. This 1099k law needs to be repealed completely.

whodini said:   This 1099k law needs to be repealed completely.Proposed alternative?

Skipping 17 Messages...
"a hydrogen-fired boiler for supplying supplementary heat; and an injection manifold for metering controlled amounts of superheated combustible gas into the working fluids to optimize efficiency. Wind or solar power may be converted to hydrogen in an electrolysis unit to produce hydrogen"

The patent application just screams, "perpetual motion."


SUCKISSTAPLES said:   nsdp said:   svr411 said:   nsdp said:   



"You've been a consistent apologist for lawyers, accountants, bureaucrats, and other rent-seeking leeches, so I'm not going to bother to respond any further than to say you don't live in the same world as the rest of us who create things for a living. "

Tell me have you ever accomplished or created anything like this. I am one of the co inventors. http://www.wipo.int/patentscope/search/en/detail.jsf?docId=WO201...

s.

Nice !! Are you Kelly or Hinders ?



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