Credit Cards: Pain in the neck or welcome relief? Ask the IRS . . .

I heard from a business owner yesterday that she "doesn't want to have to spend money to make money." Now, I think I understand and respect her point of view, that she doesn't want to have to pay fees to take a payment from her customers.

Now, there's definitely a time and place for taking cards. If you're not doing a lot of business every month, or don't expect to, I wouldn't recommend messing around with card processing solutions, it IS simply not worth your time or money. However, if you plan to grow, and grow big, card processing can be the foundation of your ability to expand quickly and sustainably. There's already a tremendous network of banks and institutions that exist to decrease the time it take for your customers to pay you, make it easy for them to pay you, and, following from the above, increase the money they are spending at your business.

Recently the IRS gave businesses another reason to take cards that can reduce your end-of-the-year paperwork! Now how does that sound? Please note the below article from Portland Business Journal:

IRS won’t require 1099s if you pay by credit card

Portland Business Journal - by Kent Hoover Washington bureau chief 

Internal Revenue Commissioner Douglas Shulman said his agency will provide small businesses with at least partial relief from a new paperwork burden created by health care reform.

Under the new law, businesses in 2013 will be required to file separate reports with the IRS for every corporation that was paid more than $600 for goods and services. Businesses currently have to file a Form 1099 only for payments to independent contractors. Small businesses complain that the new rule will dramatically increase the number of 1099s they will have to file each year.

“I want to assure the business community that the IRS will look for opportunities to minimize burden and avoid duplicative reporting,” Shulman said during a speech at the American Payroll Association’s convention in Washington, D.C.

“We plan to use our administrative authority to exempt from this new requirement business transactions conducted using payment cards such as credit and debit cards,” he said. “These transactions will already be covered by reporting requirements on payment card processors, so there is no need for businesses to report them as well. So, whenever a business uses a credit or debit card, there will be no new burden under the law.”

Shulman said the IRS “will be spending the next several months soliciting input from businesses of all types and sizes before proposing regulations to implement” the new information reporting requirement in the health care law.

“As we proceed with our planning, we won’t hesitate to consider alternate approaches, including working with Congress to address any potential implementation issues that may arise during this process,” Shulman said.

Congress included the expanded 1099 reporting requirement as a way to help pay for the health care reform bill. Third-party reporting of payments makes it harder for businesses to hide their income.

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Read more: IRS won’t require 1099s if you pay by credit card - Portland Business Journal