I did $7000 of contract work for a company in 2018. At this time I still haven't been paid for this work. Do I report this $7000 as income on this year's federal and state taxes even though I haven't received payment? If they pay me in 2019 is that when I pay taxes on the $7000? Do I report it as a loss on the 2018 taxes? Not sure what to do. I also haven't received a 1099 Misc yet from the company.
No, you do not pay federal taxes on income you have not received. If you receive payment in 2020 for the unpaid contract work then you will report that income on your 202020 tax return When you receive your payment the company should also provide you with Form 1099-MISC as your payment is over the $600 threshold.
[Edited 03/11/2020 | 1:16 pm PDT]
No, you do not pay federal taxes on income you have not received. If you receive payment in 2020 for the unpaid contract work then you will report that income on your 202020 tax return When you receive your payment the company should also provide you with Form 1099-MISC as your payment is over the $600 threshold.
[Edited 03/11/2020 | 1:16 pm PDT]
I have the reverse situation. Completed work in 2019 as a contractor and paid taxes for the work in 2019. Received payment ($2,200) in January 2020 for the work and received a 1099-NEC in 2020. Is there a way I can show on my 2020 return that I already reported the income and paid required taxes in 2019?