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Thread: another tax question

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    God/dess Emily's Avatar
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    Default another tax question

    If you ordered something (tax deductible) in one year and received it that same year, but paid it off in the following year, which year does it fall under?

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    Banned Melonie's Avatar
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    Default Re: another tax question

    I'm not sure exactly what you are talking about Emily. I'm assuming that you're not talking about buying something via a loan or credit card, but simply ordering something and paying the invoiced amount in full 30 days later (or similar). If your 'business' does its accounting on a cash basis then you would claim the deduction in the same year that you actually paid for the item.

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    God/dess montythegeek's Avatar
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    Default Re: another tax question

    Minor extension to Melonie's "cash" basis comment--Something ordered on a credit card would be an expense effective the billing date for most things to your card not when you pay the bill.

    There is an exception for anything involving a piece of capital equipment like a computer to track expenses which follows an additional/stricter "placed in service" (used in the business that year) rule.

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    God/dess Emily's Avatar
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    Default Re: another tax question

    that's what I needed to know.

    Thanks!

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