Cash vs Accrual Income on Schedule C

[LightStache]

I started an LLC in 2024, sole proprietor tax treatment, and asked my single customer to delay 2024 payments until Jan '25. They agreed and asked me to send monthly invoices for their accruals. Everything has gone to plan and they paid in January.

I haven't received a 1099, which seems correct because I understand 1099s are supposed to report on a cash basis.

BUT in the past I've received 1099s that report on accrual basis. I'm concerned that this customer's big 4 accounting firm will file a 1099, at some point, showing this income on accrual basis (i.e. in 2024).

So I'm thinking of reporting the income on Sch C Line 1 and then adjusting (subtracting) it out on Line 6.

Is there any reason this could be a bad idea?

[dandarc]

https://www.wegnercpas.com/interplay-between-method-of-accounting-and-1099-reporting/

"1099 Reporting: Calendar Year Basis and Cash Basis
Regardless of the accounting method chosen, compliance with IRS regulations for 1099 reporting is essential. Both cash basis and accrual basis businesses are required to issue 1099s for reportable payments that are actually paid during the year (i.e., cash basis method).  In addition, the business looks at the calendar year not the fiscal year in which the business operates."


You're fine - don't pull income forward unless you have some real reason to do that. If they send you a 1099 showing payment was made in 2024 and the check didn't actually get cut until 2025, then it is your customer's error - 1099 is always supposed to be the date the cash was actually paid.

[forummm]

1099s are due by end of January. If they didn't send one already, they probably won't send one for this year.

If you are worried, you can always file for an automatic extension that gives you until 10/15 to file (just make sure you've paid everything you expect to owe by 4/15 since there's no extension for paying tax). And you can also check your IRS transcripts (login at IRS.gov with an id.me account) in June or July to see if there's a 1099 there that you need to include on your return.