I am in the same position. I perform work as a contractor, and am issued a 1099-Misc by a company that uses accrual based accounting. I am on cash basis. The company includes the December payment on their 1099-Misc. I do not receive the payment, via US mail,, until 2nd week of the following month, e.g.., mid-January the following year. As such, I request that my accountant use the 1099 # for Gross Income on Schedule C, and add that December payment to Schedule C, Expenses as "Income not constructively received in <tax year>".
That said, what do you do the following year when you have to account for the income received in January, e.g., the following year same thing happens, where December payment is again listed as "Income not constructively received in <tax year>", but, how do you account for the income which was received/booked in January of the current tax year for previously year's December payment (included on previous year's 1099-Misc)?
Can this be entered as a negative expense on Schedule C, Part IV Other Expenses, along with positive expense for the income not constructively received (December payment), i.e., two line items on Schedule C, Part IV Other Expenses, section, one to account for "income constructively" received in January (negative #), and the other "income not constructively received <current tax year>" (positive #).
This would then always allow my accountant to use the reported 1099-Misc # on Schedule C, Gross Receipts, and account for the inflow in January and expense December payment which will be accounted for the following year. Gross Receipts on Schedule C + two line items, one negative, one positive, would be exactly what is reflected as income for current year on my books/cash-basis.
