topic Self-Employment Income and 1099? in Self employed

Self-Employment Income and 1099?

davis_mc — Tue, 31 Dec 2024 17:51:12 GMT

Hi,

I have a question and especially in consideration of like this time of year (Dec 30th and 31st). Its my understanding that one reports income based on when they receive it.

This is where the rub question comes in. I know somebody that submitted an invoice payment like on the Dec 30th. But it takes a days to get to me FI. So, I am not going to receive that payment in my account until like the 2nd.

So, how will this work? They are going to report a 1099 based on the amount they submitted for payment. Yet, I would report the income I received in up until Dec 31 based on what I received. So, there would be a difference based on what they submitted I haven't received. How is this dealt with?

Re: Self-Employment Income and 1099?

pk — Tue, 31 Dec 2024 19:00:32 GMT

@davis_mc , this will generally be come under the "constructive receipt " heading ---- if the amount is in the "mail" over the end of year , it is as if you had received it when mailed. So it will be 2024 income even if you do not get it in your hands before a few days into 2025.. It will generally also be the case if the check gets lost and is replaced say by end of Jan in 2025 , depending on exact facts and circumstances.

Does this make sense ?

Re: Self-Employment Income and 1099?

Bsch4477 — Tue, 31 Dec 2024 19:01:51 GMT

Report the income as it appears on the 1099-NEC. That’s what the IRS computer will be matching.

Re: Self-Employment Income and 1099?

davis_mc — Tue, 31 Dec 2024 19:27:49 GMT

Thank you all and very much appreciate it!

You all have a very happy and safe New Year!