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TAXES - Do you claim Income that has not been received?

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Beau BrothertonTAXES - Do you claim Income that has not been received?
by on Feb 18, 2009 at 9:17:41 pm

Hello to all,

I'm getting a late start on my taxes, :( And I have a question on how much you claim for whooting a wedding. As all of you know, usually you book a wedding several months (sometimes even over a year) before the wedding occurs. So your sell and deposit is received in one year (2007) and the remainder of the balance is in the next year (2008).

My deposit are always 50% of the total balance (including sales tax). So my Quickbooks are showing a much larger Income than I actually received. And yes, 2007 is the first year that I have finally gotten busy, so this is the first tax preparation that I have ran into this.

Any help would be greatly appreciated! :)

All the Best,

Beau Brotherton
Macbook Pro 2.4GHz, Intel Core 2Duo, 4GB

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Jon GeddesRe: TAXES - Do you claim Income that has not been received?
by on Feb 20, 2009 at 6:03:52 am

Your Quickbooks shouldn't be showing money that you haven't received. You can do it several ways, but whats important is that you are consistent with the way you choose. The easiest way we've found to do it is report just the actual money that came in, regardless of when the actual job is. True, you will have gotten paid for jobs in 2007 that didn't occur until 2008 (or maybe even 2009), but you will also be doing jobs that you received payment the year before, so it all balances out.

So bottom line, if you collect a deposit in 2008 for a job that occurs in 2009... report that deposit as income for 2008, and the remaining balance will be reported in 2009 when you receive it.

Jon Geddes
Motion Graphics Designer

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