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New Member
posted Jun 5, 2019 11:10:55 AM

When customer reports payments on 1099 on accrual basis and we go on cash basis, which do we report?

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1 Replies
Expert Alumni
Jun 5, 2019 11:10:56 AM

Your customer should not be calculating payments made to you on an accrual basis.  Individuals must prepare their taxes on a cash basis.  If your customer included payments not yet made to you as of 12/31/15, you have two choices:

  • Contact your customer and request a corrected 1099. or
  • Include the full amount reported on the 1099 as income and then deduct the amount not actually received as "Other Expenses". 

If you choose the later of the two, be sure to include in your 206 income the amount you exclude for 2015.