Backdating Cash Accounting Payment?

USA Discussion in 'General Tax Discussion' started by jeeso984, Jul 13, 2018.

  1. jeeso984

    jeeso984

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    I'm a cash based accounting business. I hired a contractor in 2017, was invoiced in 2017, but the money didn't actually leave my account til February of 2018. I want to book it as a 2017 expense since that's how I actually view the business.

    If I was accrual, this wouldn't be an issue, but now my accountant is saying I either need to move my entire business to accrual, or move the expense to 2018. I don't want to because it's a massive $300,000+ expense and doesn't reflect the true situation of the services being rendered 2017 and should've been paid 2017.
     
    jeeso984, Jul 13, 2018
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  2. jeeso984

    ladyrider

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    Cash is cash. You can ask other accountants but pretty sure they'll agree with your current one
     
    ladyrider, Jul 13, 2018
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  3. jeeso984

    Fabio

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    As far as I understand, if you still have all the requirements to be cash method then you can keep the same method. Otherwise, you should be accrual method.
     
    Fabio, Aug 3, 2018
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  4. jeeso984

    ladyrider

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    Businesses can't just switch between cash and accrual for tax purposes.
     
    ladyrider, Aug 4, 2018
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