I started selling designs on zazzle a few years ago and reported my royalty earnings despite them not being paid out. This year I finally crossed the royalty threshold to request a payout and was sent a 1099-MISC. Is there a way I can deduct the amount that I reported in previous years? Thanks!
It depends, you must report your income in the year of receipt. The income is not reported as it accrues because the very first tax return you file is used to determine whether you are on the cash (most taxpayers) or accrual method.
You should amend your tax returns for the year's you accrued income and reported it if you did not receive it (minimum would be 2020 statute runs out April 15, 2024; 2021 and 2022. You may be entitled to refunds in those years if you amend them. See the deadline to receive a refund for the 2020 tax return where the statute is going to run out in 2024.
Be sure to read all the instructions carefully, before you begin, so that TurboTax knows the original numbers and the changed numbers for your amendment. You specifically want to amend a return from a prior year.
If you actually did receive money in a prior year and you included it on your return, then there is nothing to amend.