Posted by Rick_NY on 1/4/06 12:48pm
Msg #85996

Update: "which year to include $$ as income"

Someone inquired about what tax year to include a check that was written in 2005 and recieved in 2006. A discussion ensued about cash vs. accrual accounting methods.

As a practical matter, if you are going to receive a 1099 including that particular payment for 2005, how do you NOT include that as income for 2005?

Reply by CrystalT_FL on 1/4/06 4:15pm
Msg #86058

Keep decent records that show you didnt have constructive receipt of the funds until after the first of the new year. Any 1099's filed with the IRS by your customers are matched against your total income reported, not on a 1099 by 1099 basis. In other words, if you get 1099's from 10 different companies, the IRS is just looking at the grand total, and it wont usually match anyway because you may have lots of clients that you didnt do $600 worth of work for during the year

Reply by PAW_Fl on 1/4/06 4:35pm
Msg #86063

And besides that, a lot of 1099's seem to be just plain wrong. But, it should all come out in the wash when you look at a bigger, multi-year picture.