The IRS is tracking your income (here's how)

Episode Transcript

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Every time you accept a digitalpayment, swipe a credit card or

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deposit money in your bankaccount, it creates a digital
fingerprint and the IRS IScollecting EVERY SINGLE ONE In
the next few minutes, I'm goingto show you exactly how the IRS
tracks your business income intoday's digital age.
Why staying under their radar isbecoming remotely impossible.

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And most importantly, howunderstanding their tracking
system could save you fromhundreds, if not thousands of
dollars.
We're going to break down thethree way reporting system you
might not know about.
Which forms create direct linesto the IRS.
The exact penalties and interestfor noncompliance.
And what you need to do toprotect your business.

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So let's get started.
Every time you send or receive adigital transaction, there is
something called metadata that'screated..
There are multiple federal andnon federal agencies that have
access to this data, which makesit not only permanent, but
public and permissible in court.
Business owners and companieshave a responsibility to use

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this data to create a taxdocument called an'Information
Form' and then send this form tothree places.
One copy stays with the sender,which in some cases could be
you.
One copy goes to the recipient,which in most cases are you.
And then one copy goes straightto the IRS.
Last week, the IRS releasedIR-2025-15.

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The information in thispublication let us know they're
taking this more seriously thanever.
So I'm going to share somenumbers that should get your
attention.
Imagine missing just one formdeadline.
Within 30 days that's$50 perform.
Beyond 30 days?
Now we're talking$110 per form.
After August 1st, you're lookingat$290 per form.

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And if they think you'reintentionally ignoring these
requirements, that jumps to$580per form.
So here are some forms you needto be at least familiar with,
and I organized these intocategories that make sense for
your business.
First, let's talk about your dayto day money.
If you're an independentcontractor, or if you use

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independent contractors likevideographers, video editors, or
social media managers, you'relooking at Form 1099-NEC.
Are you using digital paymentplatforms or booking apps?
That's where Form 1099-K comesin.
And if you have employees, or ifyou are an employee, you'll be
dealing with W-2s.
But your money doesn't just comefrom cutting hair or running

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your shop.
Let's talk about other incomestreams.
Maybe you're investing some ofyour profits.
That's where you'll see 1099-DIVfor dividends.
Getting in a cryptocurrency?
That's Form 1099-B.
Even your bank account interestgets reported on Form 1099-INT.
If you're investing in educationwhether for yourself or a loved

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one Form 1098-T tracks thosetuition payments.
If you got student loans, that'sForm 1098-E.
Planning for retirement?
Form 5498 records IRAcontributions.
For those of you looking at realestate whether it's your shop or
investment properties or a homeForm 1098 tracks your mortgage
interest and Form 1099-Sdocuments your real estate

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transactions.
And here's one that surprisesmost people Form W-2G tracks
qualifying gambling winningsincluding sports betting payouts
when they hit certainthresholds.
Yes, even those bets you'replacing on the game are being
tracked when they pay out abovespecific amounts.
This is really important withstates increasingly legalizing

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sports betting.
But let's think bigger than juststaying compliant.
These forms are actuallybuilding blocks for your future
Want a business or home loan?
These forms prove your incomePlanning to expand?
These forms can prove the growthyou've had in business.
Need credibility with banks?
This is your paper trail.
So what should you do right now?

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First, I want you to review yourrecords.
If you don't have solid records,that's where we come in.
Reach out and let us get you setup.
Number two, when these formsstart arriving, I want you to
verify every detail.
Especially tax ID numbers andaddresses.
Number three, I want you todouble check all amounts against
your own records.
And four, whatever you do, keepevery single form.

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No shredding.
No tossIng.
The digital payment age haschanged everything about how the
IRS tracks income.
But here's the thing.
This can either be a threat toyour business or an opportunity
to build something much bigger.
Remember, the most successfulbarbers aren't just great with
clippers.
They're smart with the money.
The choice is yours, but theclock is ticking.

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Don't let the IRS give you ahaircut you can't style your way
out of.
It's your move, boss.