Telling customers or clients in December that they don’t need to pay until January doesn’t necessarily mean you won’t be paying taxes on that income in the current year, even if you’re set up on a cash basis. The IRS holds that if you had a legal right to receive payment at a given time, then they can tax you for it at that time.
If you want to defer income, the best way to do so is to negotiate a payment schedule with clients ahead of when you provide the service. Before starting a project, you would include in your contract a payment schedule starting in January.
If you’re selling products rather than services, you would need to draft an agreement with the buyer saying that you’ll hold the item until January, and at that time he or she will pay an agreed-upon amount.
The key, whether selling products or services, is to work out the payment arrangement before you begin the work or before an item changes hands.
