[TriLUG] [TriEmbed] In Need of Job Advice

[Joseph Mack NA3T via TriLUG]

On Sun, 23 Oct 2016, Brian McCullough via TriLUG wrote:

> Unfortunately, the tax department doesn't see it the way that "normal" people 
> would.
>
> By doing the work with an agreement to be paid, he has earned the income, 
> whether it was paid or not.

there's two ways of accounting. It's explained in the self employeed tax form (I 
think schedule C) notes, but I don't remember what they're called.

One of them depends on the amount of money you've actually received and spent. 
This is the one I use, This is best for small businesses as you don't record 
income or expenses till the money changes hands.

The other is what people promised to pay. eg you make a sale and you record the 
money as income, even though you don't have the money in hand. If you wind up 
not receiving the money, you then have to fill out another form saying you 
didn't receive the money. This is the one big businesses, eg ENRON, use.

You pick the way you're going to do it and you can't change (well you can't 
change easily.)

eg last year (2015) I earned some money but didn't receive the check till 31 Dec 
after the bank closed. I deposited the check on the first day in jan that the 
bank was open. It's in my bank statement as being deposited in 2016, even though 
the job was done in 2015. I will be telling the IRS that I earned the money in 
2016.

Joe

-- 
Joseph Mack NA3T EME(B,D), FM05lw North Carolina
jmack (at) austintek (dot) com - azimuthal equidistant
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