contractor income question

[connorsfamly]

For the last 20 years I have worked as a local Boston area contractor for a Virginia based company. I coordinate a ice hockey program for beginners. This requires that I attend 17 sessions and collect payments and paperwork.  I am paid $500.  I file a form C with $500 income and about $150 in deductions, mainly mileage. The program runs Jan-April and I am typically paid in October. This year my $500 payment did not arrive until Jan 2.  Since all of the work was done in 2023, can I file my standard form C even though I did not cash the check until January of the following year?

[AmyC]

You can file a schedule C with the expenses. Should you include the income is the question. While you received the check on Jan 2 that doesn't tell me when the money was available to you. If they said "swing by and pick it up" and you said, "no mail it", then it was available sooner than when you received it.

If you had access to the income in 2023, add it to your sch C. If not, then don't add it to your sch C until 2024. 

See also:

Small Business and Self-Employed Tax Center - complete guide

[connorsfamly]

I tried entering the mileage deduction without the income and there is no impact on my tax owed. Its like the milage deduction is of no value without the schedule C income.  Can I deduct 2023 mileage in addition to 2024 mileage when I do my 2024 taxes?

[Vanessa A]

You are correct.  For that amount, depending on what other income you have, it likely will not have any impact on your taxes.  What other types of income do you have?  Are you getting a full refund?  Do you owe anything?  If you are already getting a full refund or if you didn't have any taxable income to start, a reduction in income will not help you.  For example, if you worked at another job and you made $10,000 and you are single, you would have no taxable income because the $10,000 is less than your standard deduction of $13,850.  If you have no taxable income, decreasing your income would not have an effect on your return.

No, you cannot deduct the 2023 mileage when you file your 2024 return.  Mileage must be deducted in the year it is driven. This may be one of those times where you lose the benefit of the deduction.  

As mentioned above, were you able to access the payment in 2023 or it was mailed to you and you had no access until 2024 when you received it?  If you could access it in 2023, then you could include it on your 2023 return.