I billed my clients quarterly in advance, Nov-Jan, Dec-Feb (rolling quarters). I sold my business to another firm effective 1/1/2024. So the 1099-NEC I received from my custodian shows income for Jan-Feb 2024 that belonged to the new firm. How can I account for this on my Schedule C so my income isn't overstated?
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You'll issue a form 1099-NEC to the new firm for the amount of fees that you transferred. This'll allow you to deduct that amount from your income.
Thanks for the quick reply! Do you mean issue them a 1099-NEC for 2023? Where do I enter this in TurboTax so that it comes off my income?
You should report this on your Schedule C as an expense. IT could go under the Other Expenses section, and write a description like advance transfer or fee transfer. To enter this in TurboTax:
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