regular register with Square terminal

[CHAIRministries]

2021 was our first full year using the terminal, I believe we started in Oct. 2020, soon after we realized people wanted to donate to our ministry using their debit cards so we turned off the taxes on the terminal for that purpose and others wanted to pay rent, so didn't need taxes for that either. Another issue is, we ring up all sales from our thrift store on a regular register which adds taxes therefore we just decided to keep the sales tax turned off and typed in the total with taxes for the customer to swipe their card. Now is when I'm realizing this is a huge mistake, Square has turned in the total sales including taxes as Income to the IRS!!! I did not know that was going to happen, what can I do to change it with Square? I will be turning the taxes on to the terminal but I need to change the IRS 1099-K form.

[jjgard]

Your best bet is going to be to contact Square Support directly.  Although I don't know that there will be much they can retroactively do.  I wish you the best of luck on your issue though, I can imagine it's frustrating.

Is your organization a certified non-profit?  It may not matter what was reported to the IRS on your 1099-K if you don't pay taxes anyhow.

[CHAIRministries]

we are no longer nonprofit and pay taxes, thanks for your reply

[Donnie-M]

@CHAIRministries as to the 1099k form, it is a gross receipts form and has nothing to do with sales taxes.  It merely shows how much money was processed on the payment platform.  You would be deducting taxes paid or not owed through your accountant or tax professional.

Everyone's 1099k form from square includes all payments swiped.  You can use the system you are using without any problems as this is an accounting thing.

Hope this makes sense.

[CHAIRministries]

Thanks for replying, I think I understand what you're saying. Our cashier is hating it with the taxes turned on, it's confusing for him to type in the before taxes amount when sometimes the register receipt isn't showing through the window yet. It's something new, an extra step to remember so a tad bit time consuming which makes him nervous when he has a line forming. It would be so much easier if we could continue with taxes off! I will speak to our accountant, Thanks!

[CHAIRministries]

oh and another question if you know, On the page that I enabled taxes, at the bottom it has a tab that says something about taxes included in the sale but doesn't show on the receipt. Does that mean I can have the taxes turned off but Square will automatically separate the tax amount for me?? 

[Donnie-M]

@CHAIRministries You could try it out and see how it behaves, I am not sure if it auto adds it to the custom price you put in or if it will do what you want which is the amount you put in is the price with tax.  I haven't used that slider but it would be easy to test for you and yes the report would show for the tax on your report which would be a good thing either way.