Author Topic: 1099 Taxes based on payout or earnings? (Read 4176 times)

JohnTravolski · « **on:** December 27, 2020, 01:51 »

Let's say I earn $100 in December 2020 on Adobe Stock but don't receive the payout for this income until 2021. Does Adobe still report this as earned income on the 1099 for 2020, or does it only report what has been paid out to me in 2020?

I'm just wondering because, for audit purposes, I have been keeping track of all payments I have received from them, not platform-specific earnings. That won't do me much good if the 1099 reports the income based on when it is put into my account versus when I actually receive the payment since they wouldn't line up.

mj007 · « **Reply #2 on:** December 27, 2020, 13:32 »

Mat is this something new. I may be incorrect, as my wife says I am most of the time. I thought in past years I was only charged taxes on what I received payments for in that year. I thought money not collected that year was taxed deferred to next year or until I cashed it out ??

Sundry Photography · « **Reply #3 on:** December 27, 2020, 14:00 »

Adobe has always sent 1099 based on earnings, not payments and it must have something to do with the fact that you decide when to request your payment (so you are able to control how much cash you report each year), compared with SS or IS where this is not under your control.
IRS permits cash accounting for small businesses / self employed.
https://www.e-file.com/help/cash-accounting.php

Sean Locke Photography · « **Reply #4 on:** December 27, 2020, 17:14 »

I always do cash reporting, so it all evens out.

Uncle Pete · « **Reply #5 on:** December 28, 2020, 09:16 »

Thanks for asking, I'll make a note. I just work from the 1099s so I never noticed the small variations. But good to know.

sgoodwin4813 · « **Reply #6 on:** December 28, 2020, 10:50 »

Quote from: mj007 on December 27, 2020, 13:32

I may be incorrect, as my wife says I am most of the time.

Listen to your wife.

Adobe has always done it that was as far as I know. All of the other companies do it by payouts, so if you don't request a payout then you won't owe any taxes until you do. With Adobe you owe taxes regardless of payouts. The good thing about that is that you won't owe any more when you do claim it.

SpaceStockFootage · « **Reply #7 on:** December 28, 2020, 14:22 »

But don't the majority of other companies not have the ability to request a payout... they send them to you automatically when you reach a certain amount?

sgoodwin4813 · « **Reply #8 on:** December 31, 2020, 22:55 »

Quote from: SpaceStockFootage on December 28, 2020, 14:22

But don't the majority of other companies not have the ability to request a payout... they send them to you automatically when you reach a certain amount?

Dreamstime, Canstock, Bigstock, Deposit, Featurepics as well as Adobe all hold onto your earnings until you ask for them. Might be a couple of others, I can't remember off the top of my head. I usually go and request my money from all of those at the end of the year, although never got around to it this year - will make my taxes easier in April.