Reporting Income Correctly

Quick question. If a shopper completes an assignment in December, he/she gets paid in January 2018. Is it correct to report this income in 2017, or 2018?


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You can do it either way if you are reporting it as business income, but you have to do it the same way for every shop and for every year. When you fill out your first Schedule C for business income, there will be a line asking if you are using the cash method or the accrual method. If you want to report income based on the date you get paid, use the cash method. If you want report the income based on when you earn it, use the accrual method. Once you choose a method, you have to use the same method every year, unless you go through a complicated process to switch over. I prefer the accrual method personally. What I make is what I make. If for any reason I end up not getting paid for a shop that I reported as income, I subtract it from my income the next year.
Depends upon whether or not you're using a cash basis. As long as you consistently use the same method each year, you'll be okay. I wait to report until it's paid rather than earned. Easier for me.

"Let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you - and why?” ~Walter Williams
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