- Jurisdiction
- Pennsylvania
My question is about whether business income is supposed to be counted as income for 2020 or 2021.
Background:
My LLC will be getting paid commissions as an independent contractor in January for activity that occurred this month. After doing some research online, e.g. paid in january for december 1099 - Google Search, my understanding is that this payment is supposed to be counted as income for 2021 and is supposed to appear on a 1099 given to me in 2022. However, when I ran this by the company that will be paying, I was told they are intending to give me a 1099 for 2020 for this income, despite paying me next month. I was pretty sure they are making a mistake with that, but didn't want to push it.
1. Aren't they making a mistake, and shouldn't the earnings really be on a 2021 1099 even though the payment is for activity that occurred this month?
2. Assuming they are making a mistake with that, even though they are making a mistake, isn't it true that their erroneously created 2020 1099 has no bearing whatsoever on what I am both allowed and even required to do with regard to what year the income is supposed to be counted for? I.e., isn't it still true that I am supposed to report the income for tax year 2021 because I will only be getting paid and only constructively receive the payment (by bank wire transfer) in 2021 despite that they plan to report it on a 1099 for 2020?
This is my understanding, that despite what they intend to do with the 1099, I am to count it as 2021 income for all official and tax purposes.
PS: the jurisdiction for this post should really be California, which is where the payor is, but I can't edit that and my understanding is that it doesn't matter because I'm talking about the national level, not just state.
Background:
My LLC will be getting paid commissions as an independent contractor in January for activity that occurred this month. After doing some research online, e.g. paid in january for december 1099 - Google Search, my understanding is that this payment is supposed to be counted as income for 2021 and is supposed to appear on a 1099 given to me in 2022. However, when I ran this by the company that will be paying, I was told they are intending to give me a 1099 for 2020 for this income, despite paying me next month. I was pretty sure they are making a mistake with that, but didn't want to push it.
1. Aren't they making a mistake, and shouldn't the earnings really be on a 2021 1099 even though the payment is for activity that occurred this month?
2. Assuming they are making a mistake with that, even though they are making a mistake, isn't it true that their erroneously created 2020 1099 has no bearing whatsoever on what I am both allowed and even required to do with regard to what year the income is supposed to be counted for? I.e., isn't it still true that I am supposed to report the income for tax year 2021 because I will only be getting paid and only constructively receive the payment (by bank wire transfer) in 2021 despite that they plan to report it on a 1099 for 2020?
This is my understanding, that despite what they intend to do with the 1099, I am to count it as 2021 income for all official and tax purposes.
PS: the jurisdiction for this post should really be California, which is where the payor is, but I can't edit that and my understanding is that it doesn't matter because I'm talking about the national level, not just state.
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