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Money earned in given tax year or money paid in this period of time? Some money might never be paid because contributor will not reach payout limit. Is is counted as income?

Typically on the 1099's you receive, it is money paid out. So my payout for December that I will probably request on Jan 1st will be on next year's taxes and last year's December will be on this year's taxes.

I believe this is correct. US people at least (I don't know about other countries) would be taxed on the money when it is paid to them. If it is never paid to them, then they never owe taxes on it.

The part about December is correct. if you defer asking for your December, 2010 earnings until January, 2011, you would not have to pay taxes on them until April, 2012. Personally, I haven't been requesting payouts since October. However, some agencies have a limit on how much you can earn without requesting payment. I believe on SS that amount is $2000. I.e. if you have earned more than $2000 at payment time, SS will pay you whether you want it or not.

Similarly, if the agency collects money in 2010 and does not pay out commissions on those sales until 2011 they can't claim that commission as an expense in 2010 and thus must pay more in taxes for 2010.