If you're just setting up a small business, it can be confusing figuring out how to process credit card payments, deposit cash and pay your bills. For most businesses, this means opening two distinct types of accounts — a merchant account for your credit card transactions and a traditional bank account for your cash sales and to pay the bills.
You can't run a retail business today without accepting credit and debit cards as payment. After all, nearly three out of four retail transactions in the United States are completed using such cards. No longer are merchants tied to sales counters and brick-and-mortar stores. The advent of mobile credit card processing has made it possible for retailers to leave the store behind and go to where their customers are.
It's March, and that means tax season. If you have a merchant account so your business can accept credit and debit card payments, you should have received a 1099-K form from your payment processor by the end of February. What do you do with this form and what are your tax obligations for money you receive from the processor? Here’s a quick rundown.