My 1099-MISC includes income not received until 2017 so can I use my QB income or must I use my 1099-MISC?

[denisehall1901]

The payer issued the check on 12/31/2016 but I did not receive and deposit it until January 6, 2017.  The amount is reflected in my 1099-MISC, though QB shows it as income for 2017 (not 2016).  can I use my QB income or must I use 1099-MISC.

[AmyT · Accepted solution]

If you received the checks in 2017, then they are not 2016 income for you.  

It is quite common for someone to mail a check at the very end of the year in order to include the amount in their expenses for the year.  This does not necessarily mean that you received the income and have to include it on your income tax returns.

If the total recipts you report for the year exceed the amount reported on all 1099s that you receive, you will not have any problems if you only include the income actually received from that customer.  However, even if you need to report the full amount, there is a workaround.  You will want to report the amount included on the 1099 but NOT received during 2016 as a miscellaneous expense.  Use "1099 income not received" as the expense description.

Please note that whether you reduce your Schedule C income or treat the difference as an expense, it will be 2017 income to you that will not be included in the 1099 that you receive from that customer.

[blueflipflops]

I have same issue for my 2017 tax year my customers 1099 includes check dated Dec 2017 but not received until Jan.  Where in Turbotax 2017 do I show the reduced income or deduction for this check amount.  There are many business expense categories but not sure which one to use. Please be specific.

[mbasbury920]

This is also my question this year. Is there guidance as to where this goes? Thank you.

[blueflipflops]

the issue with the answer is that the company that mailed the check that wasn't received until following year. The 1099 the company sent me included the amount of the check. having them re-issue a 1099 is not going to happen.  I am cash basis so I won't count the check as income for the year the check was mailed and the amount included in the 1099.  I need to deduct this amount from last years taxes.  In addition this will match my bank deposit records for prior year and year the deposit was made. Where in Turbo tax would I deduct the amount of the check that was deposited in the following year.  

[blueflipflops]

followup question: How is the income reported in 2018 (ie the year the money was deposited)