How to Reconcile your 1099-K to your QuickBooks Data
We received our 1099K from the QuickBooks Merchant Providers (Innovative Merchant Solutions LLC). We also see on our corporate return (IRS Form 1120) that starting next year we will need to enter the amount of funds we received from the merchant provider per the 1099K, then also enter the amount received through non-merchant transactions. Since we are on an accrual basis, have a huge amount of accounts receivable per month and also deal with sales tax, going from our bottom line on our P and L to calculating the amount received through non-merchant transactions and the amount on the 1099K will be an astronomical task. The IRS’ definition of Gross Sales will also make this task difficult. We will be required to add back in each return. This will have to be done with a review of each days receipts. Fortunately we have not done summary entries into QuickBooks financial and have all the detail there. Is QuickBooks working on a solution for this? Especially since we have QuickBooks POS, QuickBooks Financial and QuickBooks Merchant Services, we are hoping there is a work around or a report that calculates this in our future. Fortunately it is not required this year or we would be scrambling to reconcile things. Given our volume of transactions, we cannot wait until the end of next January, when we receive our 1099K, to reconcile this amount and have our information to the CPA by mid February, in order for them to do our return by 3/15. We will probably tackle this as each merchant statement posts, but this is still a HUGE task. Please review form 1120 and the instructions as needed. Having a work around available would be a HUGE incentive to going 100% QuickBooks (Financial, POS and Merchant Services). A big selling point I would think. Since you are so well connected with QuickBooks I thought I’d start by asking you.
Trying not to panic…
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.