1099-MISC issue between 2017 and 2018

[PLabrozzi]

Hello,

Last year on my 2017 tax filing I received a 1099-misc from a client. I also do all of my own books in quickbooks and imported my year's info from there. When I did my turbotax, I subtracted the amount from their 1099-misc from the general income, where it would have already been included. 

However, this year I received a new 1099-misc from them and I realized I may have made a mistake last year. This year's has money they paid me for a Dec '17 bill that I deposited in January '18. However, that money was reported as income by quickbooks in the '17 tax filing because I had marked the checked received in December '17 but not deposited until January 18'. So it's as if I needed to subtract more from last year's income (but didn't) and am not sure how to reconcile it now with this year's general income, as this year's I do not have enough to subtract it from.

Any ideas?

[IsabellaG · Accepted solution]

If you received the check in December of 2017, but you didn't deposit the check until January 2018, It would have been taxable to you in 2017 because as a cash basis taxpayer income is constructively received when it is made available to you without restriction. You can't hold a check until the next year to deposit (well, you can, but it still counts as income in 2017). Likewise, whatever the client paid you in 2017 should be on the 2017 1099-MISC, and not on your 2018 1099-MISC from that same client.

Don't you show in QuickBooks where your income came from? Usually, when you receive a payment it's linked to a customer. You should be able to review your income from both years to figure out if the 1099's from your client are correct. You should report the correct income no matter what the 1099's say because your records should show the correct amount. If 2017's income was reported incorrectly, you'll need to amend your return. 

[PLabrozzi]

Thank you for your reply. The discrepancy here seems to be that quickbooks and turbotax treat the income as when the payment was received, not deposited.

So it was received in December 2017, but because of other circumstances, I couldn't get a chance to deposit it until Jan 2018. 

So their 1099's for 2017 now looking back, was too little, and for 2018, too much, as their 1099 seems to be based on when the funds actually left their account. 

As you say it seems more and more like I will need to amend 2017's return as these funds they have in their 2018 1099 were submitted as general income in 2017. Although that still leaves me unsure of how to include it in my current taxes. 

[IsabellaG]

You should report the income that you actually received in 2018, whether or not the 1099-MISC's are correct. The client may be doing it all wrong, but that doesn't mean you have to go along with it. Go through your records carefully to make sure that your income is recorded in QB and also on your return. Then, if you ever are questioned, you can show that you reported the correct income in the correct year.

[napperdickie]

I need to print my 2017, 2016, 1099 2017, 1099 2018. But try and get sites I have already been to. I don't know what else I can do to get these??

[Critter]

TurboTax's instructions for printing and accessing current and prior returns are

• For on-line returns,presented here https://ttlc.intuit.com/questions/1900748
• For download/cd prepared returnshere https://ttlc.intuit.com/questions/1900639