merchant reporting

funny thing I signed up for square
https://squareup.com/card-reader
for a separate biz, they did not need my fed tax number but MY restaurants processor had a sheet for me to fill out and stated I will be getting a 1099k, anyone know why that is?

You should check with a tax professional on that. Last years tax forms, or at least the 1065 form, had a line to report income from sales that were paid with credit card. So you have to subtract that amount from your total and then provide it on a separate line. Your CC provider is required to give you this data on a 1099. I assume they are looking for fraud by looking at the ratio of CC sales to total or some goofy thing like that.
They did not use this line last year, probably because card processors were not ready for it, but will be requiring it this year.

Rick

Credit card processors are only required to report for businesses with over $20,000 in gross receipts for the year. I’m guessing you’ll get a request for information from Square it you exceed that.

You will no longer be getting a copy of the 1099-K (or maybe you will, but you won’t have to report it anywhere). The IRS instructed everybody to enter -zero- on the new line 1a for 2011, and in 2012 said they would not require it for this year or future years. So, the requirement appears to have gone away.

It was going to be a hot mess to try to reconcile the 1099-K with the income on the books. Restaurants would have a massive discrepancy to reconcile because of tips.

The IRS will still be getting a copy of the 1099-K, which will help catch skimmers while not leaving us with an accounting burden.

Edited to add, because we posted at the same time:

They did not use this line last year, probably because card processors were not ready for it, but will be requiring it this year.

The reconciliation requirement is gone: IRS Kills Tax Reg

But as I posted above, the credit card processors are still required to report for businesses over $20,000, hence the request from the OP’s company.

here is my biggest worries!
lately my total CC sales are around 80%
throw in tips, delivery fees, checks (processed threw merchant services) and cash back VERY RARELY do we have cash here. There are a lot of times I have to take money out of petty cash just to balance.
then banking fees come out separately so for instance
if I have an 80 dollar delivery order and they tip 20 dollars
I am reported 100 dollars
but in fact 2 dollars goes to a delivery fee to the driver, the 20 dollar tip, the 8 dollars in sales tax and then the 4 dollar proceesing fee, so in reality I have 66 dollars on the 100 credit card transaction. ouch