1 RARELY DISCUSSED ADVANTAGED OF CREDIT CARDS

Credit cards are often used irresponsibly which can lead to expensive high-interest debt. For that reason, I agree with financial experts like Dave Ramsey on some negative aspects of credit cards . However, this blog pertains to one advantage of Business Credit Cards that is rarely discussed.

As a Fitness Coach, you might have expenses such as videographers, business coaches, sales/marketing mentors, etc. If you paid that person or business more than $600 in 2019, you will need to file paperwork on their behalf with the IRS. IRS mandates that you issue them a 1099 by January 31st or face a penalty of $50 (up to $100) per 1099 that is not issued. This can add up quickly as it goes up the later you wait after the deadline.

(This excludes corporations. Fun Fact: IRS requires that you issue a 1099 to law firms even when they are incorporated.)

BENEFIT OF CREDIT CARDS:

If you paid a vendor via Credit Card or PayPal, they will file that 1099 for you! (Unfortunately, debit cards and ACH payments do not qualify.)

CONCLUSION & ACTION STEP:

So if you have vendors that you pay via check, debit card, ACH or cash that will require a 1099, they will need to fill out a Form W-9. The W9 will confirm you have the correct and updated information needed. I recommend that you have them fill out the Form W9 BEFORE you make their final payment in 2019 so you can file the 1099 by deadline of January 31st 2020.

Disclaimer: This is meant to be educational and not tax advice for your specific situation. Please consult your tax professional regarding any 1099s that you will need to file in January 2020 for year 2019.

Best

Pat