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If earned $20 total from music business in all 2019 but performed service in 2020 (also had job income) do I file schedule C ($20) or can I file in 2020 as accrued income

 
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1 Reply
AnnetteB6
Expert Alumni

If earned $20 total from music business in all 2019 but performed service in 2020 (also had job income) do I file schedule C ($20) or can I file in 2020 as accrued income

Most taxpayers operate on a cash basis and report income when it is received versus when the service is performed.  Therefore, the income should be reported on your 2019 return if your were paid in 2019.  

 

Once you establish that you have a business with a Schedule C an accounting method is chosen (cash or accrual) and you must stick with that method unless you request permission to change it.  

 

For more information:  What is the accrual method of accounting?

 

 

@richards1melanie

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