[TriLUG] [TriEmbed] In Need of Job Advice

[Charles Fischer via TriLUG]

You are looking for "cash basis accounting".

-Charles

On Oct 23, 2016 9:02 PM, "Joseph Mack NA3T via TriLUG" <trilug at trilug.org>
wrote:

> 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
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