business income timing adjustments

[scarlett23696]

How do I account for income included on the 2024 1099 but not received until January 2, 2025 in Turbo Tax

[MonikaK1]

You should check with the payer as to why the 1099 amount in question was attributed to 2024 or whether the 1099 should be corrected.  If it's not going to be corrected, you should report the 1099 exactly as it was received. The IRS information matching program will be looking for it.

Constructive receipt of income is a tax term which determines when a cash-basis taxpayer has received income . Constructive receipt of income occurs when a party obtains income that is not yet physically received but has been credited to the taxpayer's account and over which they have immediate control. 

See this Cornell Law article for more information.

See here for more information on this topic from the IRS.

[VolvoGirl]

If you get a 1099 for it you can report it as income for 2024 and then make an offsetting entry to move it to 2025. Add an entry on schedule C line 27a Other Expenses for the amount you received in 2025 and say like Income not received until next year. And be sure to enter it on your next year's return as General Income not received on a 1099NEC.

[pb236]

Just want to upvote this reply.  I'd been struggling for this for year's and finally figured out the same solution as VolvoGirl offered (it was tough to find the right answer, at least as relates to using TurboTax).  But I like her wording for line 27A (other business expenses) better, or maybe I'd refine it to "Reported 2025 1099-NEC income not received until 2026".  Wasn't sure if this was okay to enter it this way, but I liked seeing that others came to the same conclusion.  For TurboTax (at least Deluxe desktop version), there doesn't seem to be any other way to dealing with timing differences.  They're perfectly legit if you use cash accounting, but I'm always a little nervous about possibly making the IRS's computers to hiccup : (  Thanks VolvoGirl!