I am new to the tax preparation world and have a question that I can't figure out the answer to. I just started using ATX, and I need to figure out what to do when 1099-NECs are on a cash basis vs financial statements are on an accrual basis. Here is the situation:
Client received 1099-NECs from clients that made payments for services in 2023 and also that prepaid all of 2024. The client is on a cash basis, so they reported all amounts paid on their 1099-NEC. The taxpayer records his books on the accrual basis, so the total income on the books is lower than the 1099-NEC totals.
Not sure how to correctly put this on the Schedule C so that the numbers work out the way they are supposed to.
Please help!
