Frequently Asked Questions

Do You Need to Send HubShout a 1099-MISC?

  • Chad Reply

    It's tax time and accountants have small businesses running around collecting W-9's so that they can file 1099-MISC for their vendors. But you don't need to send one to HubShout. Here is why:

    All of our clients pay us by credit card. The IRS started requiring Paypal and Credit Card companies to start sending a 1099-K to the IRS which would include any payments by credit card.

    The 1099-MISC instructions specifically say:
    Form 1099-K. Payments made with a credit card or
    payment card and certain other types of payments, including
    third party network transactions, must be reported on Form
    1099-K by the payment settlement entity under section
    6050W and are not subject to reporting on Form 1099-MISC.
    See the separate Instructions for Form 1099-K.

    Small businesses don't submit Form 1099-K's... just "payment settlement entities."

    Here are two other good sources to review:
    A forbes article in plain English - Forbes Article
    A IRS FAQ in gobble-gook - IRS FAQ

    I should state for the record that this is HubShout's view and that we are not tax professionals but we are in some cases more familiar with this specific issue than many accountants.

    If anyone sees it differently let us know.

    01/13 at 04:39 PM (16910)