Schedule C: Which year should I deduct expenses (Purchase date or date the charge posts to my credit statement)

Forum|Forum|4 years ago
December 31, 2021
8 replies
109 views

I purchased equipment for my photography business with an invoice date of Dec 3, 2021 but my credit card will not be charged until January 1, 2022. I use the cash method of accounting.

Which tax year (2021 or 2022) should I take a Section 179 Deduction?

TurboTax Self Employed Online

Bsch4477

Level 15

Use the date you actually made the purchase, so deduct for tax year 2021.

Critter-3

Level 15

It is always the date of purchase even if you never pay the CC bill.

Carl

Level 11

The purchase date is the date *YOU* no longer control that money. It doesn't matter when it's actually posted. If you scan that credit card today, then *today* is the day you committed to the purchase and no longer have control of that money used to make the purchase. Doesn't matter when it actually posts either.

newusernameagainAuthor

Level 5

New Twist:

The items wont ship until 2022 so they obviously wont be placed into service until 2022.

Does this change anything regarding which year I take a Section 179 Deduction? (Invoice date for purchased items was in 2021)

Mike9241

Level 15

The items wont ship until 2022 so they obviously wont be placed into service until 2022.

Does this change anything regarding which year I take a Section 179 Deduction? (Invoice date for purchased items was in 2021)

yes, that changes things at least in my opinion. the fact that you don't have the equipment and it has not been placed into service in 2021 is a material fact. you can't deduct until equipment is put into service.

Mike9241