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Do I file for paychecks unreceived? New York

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  • Do I file for paychecks unreceived? New York

    As an independent contractor, I've done several jobs for clients this year, between the months of September and December of 2006, for which I have submitted invoices but have not yet received payment.

    If the payment arrives mid-January of 2007, is that income reportable in my 2006 fed & state taxes, or should reporting that income be delayed to report in my 2007 taxes?

  • #2
    The answer is "it depends."

    There are two methods of accounting -- cash and accrual.

    For cash based, you only report receipts. With accrual, you report invoices.

    One little problem with accrual based is that you could end up reporting "income" based on a sale this year, pay taxes on it and end up having to write it off as a bad debt next year when the client fails to pay.
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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    • #3
      thanks

      thanks for the quick reply; your explanation clears things up.

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