I get paid by a corp (1099 misc) and I use part of the payment to pay (1099 misc) 3 other subs. If I receive a check by mail from the corp on 1/2/2009 (but they include it on the 1099 misc that they send me), what year do I declare the tax for the payment? If 2008, can I pay my subs immediately after (obviously in 2009) and include those payments as 2008? If 2009, then the 1099 misc from the corp to me will be incorrect. Is that OK?
"Rocky" wrote
January 2nd isn't here yet, so this is just an example of course.
For cash basis taxpayers, of which you might be, you report your income in the year received.
Why perpetuate this mess?
I wouldn't do it.
It is correct based on the client's books, which is how they must prepare their reports they send to the IRS.
Two notes, 1. If 2009 income reported in 2008 exceeds your 2008 reported income in that category, you sould report that (the mismatch not the income)on your 2008 return, or you will receive a correction request from IRS for your return based on the matched 1099's.
Bill Patch Hilliard OH
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.