(NOTE: Before you e-mail me with questions about Form 1099-K, please read this article.)
Starting in 2011, credit card companies will begin issuing a new type of Form 1099 (Form 1099-K) to some businesses and individuals. The 1099-K will detail, month-by-month, the amount of income the business received from credit card transactions. It will also apply to debit card transactions, and to payments processed by third-party providers such as Pay Pal.
Form 1099-K will only be issued to business or individuals who have at least 200 transactions and who receive at least $20,000 from those transactions. UPDATE: the 200 transaction/$20,000 exemption only applies to payments processed through third parties such as PayPal or Amazon. Businesses that process credit card transactions through their bank or credit card company will get a 1099-K regardless of the number of transactions or the dollar amount involved. The goal with these thresholds is to avoid having a 1099-K issued to someone who, for example, sells things casually on e-Bay.
View a draft of Form 1099-K at the IRS website.
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