3 ms·

There's a lot of correlated factors in all-cash businesses. Yes, they don't pay CC processing, but they often sell lower-end goods, are in worse neighborhoods w

by duado 8y ago

There's a lot of correlated factors in all-cash businesses. Yes, they don't pay CC processing, but they often sell lower-end goods, are in worse neighborhoods with lower rent, may acquire some of their merchandise in sketchier ways, etc...

perfmode 8y ago
are we at the point where we are criminalizing the behavior of people who choose to avoid credit cards and only accept cash?
- daveFNbuck 8y ago
  We hit that point a long time ago when having a large amount of cash with you became a justification for civil asset forfeiture.
- zdragnar 8y ago
  Right or wrong, it's a fairly common stereotype: a merchant who insists on cash-only transactions is dodging taxes or selling something illegal (or both, I suppose). On the topic of criminal behavior, it's also worth noting that doing business cash-only makes you a more tempting target for robbery; if you did almost all of your transactions via credit or debit cards, you'd have very little in the till for someone to steal.
  - diebeforei485 8y ago
    Being a cash-only business also means they can pay their employees in cash - often because their employees aren't authorized to work in the country.
raincom 8y ago
IRS forces card processors to issue 1099-k for any card processing payments. That's how it goes.
- pas 8y ago
  Could you please explain this for someone not familiar with the US tax rules and forms/numbers?
  - theshortofit 8y ago
    All processors ( FDC, Worldpay, Global Payments etc) are required to report credit card sales for each of their customers through 1099 reporting , This reporting is done on what is called a MID ( Merchant Identification)number. Every merchant accepting credit cards has one ( sometimes multiple) Some processors charge merchants for this reporting services to the IRS which further drives up Merchant Services cost.
  - raincom 8y ago
    In old days when cash was king, many small businesses used to under report income. Then came credit/debit cards, which require of businesses to sign up with credit card processing companies, who take the fees out and reimburse monies to your bank account. Since old habits die hard, these small businesses used to under report income despite the trail of evidence left by credit card processors. So, IRS came in and imposed a rule on these processors: send us a copy of payments paid to Mr Small Business X--and that copy is called 1099-K. This is like W2, 1099-MISC, 1099-INT. Basically, the tax man wants records from the third parties, since self-reported ones are mostly under reported.

by duado 8y ago

perfmode 8y ago

are we at the point where we are criminalizing the behavior of people who choose to avoid credit cards and only accept cash?

daveFNbuck 8y ago
We hit that point a long time ago when having a large amount of cash with you became a justification for civil asset forfeiture.
zdragnar 8y ago
Right or wrong, it's a fairly common stereotype: a merchant who insists on cash-only transactions is dodging taxes or selling something illegal (or both, I suppose). On the topic of criminal behavior, it's also worth noting that doing business cash-only makes you a more tempting target for robbery; if you did almost all of your transactions via credit or debit cards, you'd have very little in the till for someone to steal.
- diebeforei485 8y ago
  Being a cash-only business also means they can pay their employees in cash - often because their employees aren't authorized to work in the country.

raincom 8y ago

IRS forces card processors to issue 1099-k for any card processing payments. That's how it goes.

pas 8y ago
Could you please explain this for someone not familiar with the US tax rules and forms/numbers?
- theshortofit 8y ago
  All processors ( FDC, Worldpay, Global Payments etc) are required to report credit card sales for each of their customers through 1099 reporting , This reporting is done on what is called a MID ( Merchant Identification)number. Every merchant accepting credit cards has one ( sometimes multiple) Some processors charge merchants for this reporting services to the IRS which further drives up Merchant Services cost.
- raincom 8y ago
  In old days when cash was king, many small businesses used to under report income. Then came credit/debit cards, which require of businesses to sign up with credit card processing companies, who take the fees out and reimburse monies to your bank account. Since old habits die hard, these small businesses used to under report income despite the trail of evidence left by credit card processors. So, IRS came in and imposed a rule on these processors: send us a copy of payments paid to Mr Small Business X--and that copy is called 1099-K. This is like W2, 1099-MISC, 1099-INT. Basically, the tax man wants records from the third parties, since self-reported ones are mostly under reported.