Decide where customers will pay you (in person, online, or by invoice), choose a processor that fits, open it in the LLC's name with payouts to your business bank account, and understand the fees before you set prices.
Step by Step
Decide How Customers Will Pay
In person: a card reader or point-of-sale system.
Online: checkout built into your website or ecommerce platform.
Invoices: emailed invoices with a pay link — common for services and consulting.
Bank transfers (ACH) usually cost less than cards for large payments.
Open Processing in the LLC's Name
Use the LLC's legal name and EIN, and send payouts to the business bank account — never a personal account. This protects your liability shield and keeps your books clean.
Understand the Fees
Most processors charge a percentage of each sale plus a small fixed fee, and online payments often cost more than in-person payments.
Watch for monthly fees, chargeback fees, hardware costs, and contract terms. Build fees into your prices.
Follow Surcharge and Pricing Rules
Adding a fee for paying by credit card (a surcharge) is restricted by card network rules and by some states' laws. It's generally not allowed on debit cards.
Offering a cash discount is usually treated differently than a surcharge. Check your processor's rules and your state's law before adding either.
Collect Sales Tax Correctly
If what you sell is taxable, your checkout or invoices must add the right sales tax. Make sure your processor or platform is set up for your state's rates.
Protect Card Data and Handle Disputes
If you handle card numbers, you must follow the card industry's security rules (PCI DSS). Hosted checkouts and card readers from your processor reduce what you're responsible for.
Keep receipts, delivery confirmation, and customer messages so you can respond to chargebacks.
New accounts may see payout holds or reserves until the processor learns your business.
Payment Rules to Know
- Payment platforms and card processors report payments to the IRS on Form 1099-K. For third-party payment networks, the federal reporting threshold is back to more than $20,000 and more than 200 transactions per year, under the One Big Beautiful Bill.
- Report all business income on your tax return, whether or not you get a Form 1099-K.
- Subscriptions and automatic renewals need clear terms and an easy way to cancel under federal and state law.
Sales Tax Rules by State
Pick your state for its specific requirements.
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Common Mistakes
Taking payments into a personal account or personal app instead of the LLC's.
Adding a credit card surcharge without checking card network rules and state law.
Forgetting to add sales tax to taxable sales.
Not keeping records to fight chargebacks.
Frequently Asked Questions
Can I use a personal payment app for my LLC?
Use a business account instead. It keeps business and personal money separate, which helps protect your LLC's liability shield and makes taxes simpler.
Can I charge customers extra for paying by card?
Sometimes. Surcharges are restricted by card networks and some states, and generally aren't allowed on debit cards. Check your processor and state rules first.
Official Sources
General information, not legal, tax, or financial advice. Rules can change; check the official source before acting.
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