Do you accept online payments? The IRS is coming...

So, I'm not a tax attorney, but I felt that this was important and involves many of my readers.

A new law (under the "housing rescue package"), which was signed into law last week (the text isn't available online yet, but the version that passed the House and Senate is H.B. 3221 (look it up at thomas.gov), requires all payment processors (including Paypal and other online processors) to send 1099s to each merchant and to report to the IRS the income of all merchants who are paid over $20,000 per year and have more than 200 annual transactions. That may not sound like a lot for people just starting out, but ask any eBay powerseller and they'll tell you it's not a difficult threshold to make.

The reporting will begin in 2011. But starting now, if you feel that you're near that threshold, you should start making sure that you're reporting your income properly. If you're not sure how or what you should report, now would be a good time to be working that out with a qualified tax professional.

And in case you're wondering what your tax dollars are offsetting, it's the Fannie Mae / Freddie Mac bailout... Aren't you thrilled?