Posted by Susan/CA on 12/13/12 7:59pm
Msg #446463

1099 Question.

If we work during December 2012 (1st or last half) but receive payment in January, 2012 will our 1099 reflect the work/payment in December of 2012 or will it be on the 1099 for the next year? I am assuming that they cannot put the amount on the 2012 1099 unless they actually sent the money in 2012, however, I could be wrong. Any feedback would be greatly appreciated!

Susan

Reply by Roosevelt Hooker on 12/13/12 8:01pm
Msg #446464

Susan I believe if the check is cut in January 2013 it would have to be filed on next years taxes. Just make sure you double check with your accountant.

Reply by Karla/OR on 12/13/12 8:17pm
Msg #446469

My recollection from Accounting 101is that payments received the following year (2013) for services provided in 2012 would be filed with the 2013 taxes.

My .02 worth.

Reply by desktopfull on 12/13/12 8:32pm
Msg #446471

It depends on whether you are using "cash" or "accrual" method of accounting.

Reply by Donna McDaniel on 12/13/12 8:40pm
Msg #446473

I think what she is asking is what she should expect to see on her 1099's from her clients. A lot of my 1099's never match the clients so I can only assume they use a different method for accounting. I use the cash method.

Reply by desktopfull on 12/13/12 9:20pm
Msg #446478

It doesn't matter if the 1099 is right or wrong, just add up what you received by midnight 12/31 and report the income if using cash method. I get incorrect 1099's all the time, I use my figures not the company issuing the 1099. Never been able to get a corrected 1099 either from the issuing company.


If accrual method is used you add up all work done whether paid or not. But you also get to deduct supplies ordered that haven't been paid for too. It's a lot more accounting work using the accrual method.

Reply by Marian_in_CA on 12/14/12 1:20am
Msg #446497

This is so true... an accountant friend told me that 1099s are useless and he regulalrly ignores them. Why? They're frequently wrong and they come late. He said if you rely on 1099s to report your income you're just asking for trouble. HE said you need to go by YOUR books, not somebody else's.

Reply by MikeC/TX on 12/14/12 1:57pm
Msg #446540

It really depends on their accounting method. If they're on an accrual basis, the expense gets booked on their side when the job is done (if not sooner). Even if they're on a cash basis, the expense is booked on their side when they cut the check, not when they mail it. When you actually receive payment doesn't matter to them. Since you're most likely to be on a cash basis, you don't book the income until you receive the check. Your books and their books will rarely agree if you're doing work for them in December.

The 1099 amount is going to be roughly what you received from them in 2012 plus the money they owed you for work done in December but didn't receive until January (or may still be pending). As long as the difference was reasonable, I never worried about it. There are always companies that don't have to send a 1099, so if you ignore the 1099 amounts and go with what your records say, the total you must report to the IRS is almost always going to be higher than the 1099 totals.

Reply by MW/VA on 12/14/12 10:39pm
Msg #446599

Simple answer--only money received in any given year

is taxable for that year. I don't pay much attention to the 1099's, use TurboTax, & don't list them separately. I claim my gross income (which includes 1099 income). It's just simpler that way.

Reply by Linda_H/FL on 12/15/12 10:48am
Msg #446621

Again..only true if using the cash method of bookkeeping

If using the accrual method it's a whole different ballgame.