1099- When is it income??
I was paid as a contractor for work and my check was postmarked on December 29th of 2009, but I did not receive or cash the check until January and deposited January 4th of 2010. This income represents about half of what I made in the year, hence I will owe significantly more in self employment taxes if this counts as income for 2009 as opposed to counting towards 2010. I go by the cash method of book keeping so I was assuming that this income should count for 2010 and not 2009 as it was received in 2010. However the complication is that the company sent me a 1099 including this income for the 2009 year. I do not want problems with the IRS but as most of my year was slow, I simply do not have the funds to pay this much in self employment tax. What can I do in an instance like this?
Thank you for your time!