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)
  • Adam Reply

    Thanks for posting this tax information Chad. But I know people will still be confused. This law has actually been around for a few years - but it is amazing how few people know about this change.

    01/13 at 04:41 PM (16911)
  • Adam Reply

    2019 Update --- This question comes up pretty much every year. A customer of ours today told me "I've consulted 3 different CPAs on this question. 2 told me to file a 1099-MISC for HubShout, 1 said NOT to." LOL... Clearly still confusion out there. We are asking our CPA to re-re-re-verify our reading of this 2012 IRS Regulation.

    01/17 at 09:58 AM (23354)
  • Adam Reply

    Heard back from our CPA already (because he is awesome like that):

    "Hey Adam –

    No changes – you are correct, they would be reported on a 1099-K.

    I’ve found many other CPA’s are still not aware of this change from a ways back."

    HubShout LOVES feedback. So please post anything you see that we need to know related to this.

    Our mission is to "help small businesses achieve their dreams." Getting things right with the IRS is a great place to start.

    01/17 at 10:23 AM (23355)
  • Allie Reply

    Hi Adam and Chad,

    I actually just talked to a friend of mine, who is a CPA, and he said the same thing. Our resellers do not have to fill out a 1099 form at all. The only entity that may have to is a credit card processor that processes transactions to HubShout. However, there is a threshold. So, if any credit card processor that processes transactions paid to HubShout more than 200 transactions or $20,000, they won't need to send a 1099K to HubShout at all.

    01/17 at 01:06 PM (23356)
  • Adam Reply

    Thanks Allie! SO helpful.. And to be clear, the 1099K is not something any of our Resellers would need to do since they are not "Payment Processors."

    Also - Big THANKS to David A for sending in this link. He said it was helpful and much clearer:

    https://www.irs.gov/pub/irs-pdf/i1099msc.pdf

    01/17 at 01:09 PM (23357)