@AliciaP1Thanks for the reply.
My accountant has stated that if I list my book-based income, which is a very small percentage lower, than what is reported on the 1099-Misc, it likely result in a flagging by the IRS, an associated letter requesting an explanation why my reported income is less than what is reported on the 1099-Misc.
My preference is, and has always been, to list the income and expenses exactly as reflected in my books for the tax year on Schedule C Gross receipts despite the small discrepancy. On years where my booked income exceeds what is reported via 1099, there is no "mismatch" issue, or potential flag.
That said, I have seen posts on TurboTax , and specifically above in previous replies, that state you should always list the 1099-Misc # for Gross receipts and add line item(s) to account for the discrepancy as per my original post, e.g., "income not constructively received". Another link here: https://ttlc.intuit.com/community/taxes/discussion/i-use-accrual-client-is-cash-how-to-handle-for-th...
I am just trying to assess what is more accurate/correct, and to understand any implications, e.g., will the IRS automatically flag a return if Schedule C Gross receipts are less than reported income via 1099-Misc, even if the discrepancy is very small, e.g., in my case 1099 Misc is 1.02% larger, a very small discrepancy.
My inclination is to instruct my accountant to show exactly what I booked for income and expenses in the tax year, and if IRS flags it due to small mismatch, provide an explanation, e.g., payer is accrual-based, and I am cash-based and that introduces the discrepancy due to December payment
Thoughts?
