It’s 1099 season for us, so we’ve been closely monitoring any changes and making sure our clients are reporting to the best of their ability. In recent years, business owners have no longer needed to send 1099s to those individuals/small businesses that they paid via credit card or Paypal because the credit card companies are responsible for providing a 1099-K instead. It looked like CashApp and Venmo would be the next ones to follow this same procedure, but the IRS has now postponed the reporting rules for another year while they debate on it.
What does this mean to small business owners? If you are paying for services being provided to your business through CashApp or Venmo, you will still need to provide a 1099 to those individuals/small businesses. This would be back to the normal rules of anyone you paid over $600 that is not a corporation and provided a service (not goods). You can read more about 1099 rules in this post. You can also learn more about the IRS’s decision here.
For those of you that are not current clients – there’s still time to talk to us about bookkeeping for 2022. And, as you can tell, we do prepare 1099s.
Have a safe and happy new year!