1099-MISC question and timing of receiving payment via US mail

[ryschultz]

I started a consulting position and set up a individual LLC.  I have a question about the 1099 MISC and how I should report the income.  My client sent me payment for Dec on Dec 31 (I have a postmark on the envelope) so I received the check on Jan 3, 2020.  Should I report that as income in 2019 or 2020?  I use the cash accounting method so I believe it should be reported as 2020 income however how do i reconcile the difference with the 1099 MISC form? 

[DawnC]

You are correct.  Since you are a cash basis business, you report the income when received, which in your case in 2020.  Since you received a 1099-MISC for 2019, you have a couple of options.

• You can enter the 1099-MISC, and then enter an income adjustment (as a negative number under Other Self-Employed Income).  OR
• Not enter it at all.

In both cases, you need to keep detailed records in case of any inquiries and also, remember to report the income in 2020.  You won't need 1099 to do so.  

[davewp]

Thank you very much for the information. Excellent advise.