This year, there's one more 1099 form to add to the mix: the 1099-K. If your business takes payments via credit cards or services like PayPal, you may find one in your mail box later this month.
The forms will be sent by payment settlement entities -- typically, banks or other institutions that pay merchants and other businesses as settlement for payment card transactions -- and could include payments made via credit, debit or even gift cards. They'll also be sent by third-party settlement organizations -- organizations like PayPal that are contractually obligated to make payments to participating payees or merchants, in a third-party payment network -- if the gross payments to a payee exceed $20,000 and consist of more than 200 transactions.
The upshot? Many small businesses that accept credit card or PayPal payments soon will be receiving 1099-Ks; they are due to merchants by January 31, 2012. The payment settlement entities and organizations also separately report this information to the IRS.