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Ah ha, I obviously mis-read your post. Q3, now that I re-read it asks when should one want to receive taxable income from consulting services; all at once or spread out over time? To this issue IMHO;

1. As a provider of service, it is great luxury to be in a creditor position:

a. You never have to worry about getting paid.
b. You can invest the excess monies received in advance of work performed.
c. God forbid that there would ever be a squabble between yourselves & the granting organization (payor) but if there is, possession is still 9/10ths of the law.

2. The disadvantage is that (assuming you will be a cash basis taxpayer) you will have to pay tax on the entire amount in the year received. Nonetheless, you have the cash to pay the tax.

All of my above comments presume a 6 to 18 month contract. If we are talking about a much longer term contract, say 3 to 5 years or more; I would modify my response to something like negotiating a scheduled payment system that always keeps you 3 to 6 months ahead in revenue relative to when the actual work would be performed.
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