I am part shareholder in C corp. Company accrued bonus for me at y/e but didn't pay until 2018. Is this reported as 2017 or 2018 income?

[accounting7]

I am part owner in a C Corp.  The company recorded accrued bonuses at year end 2017.  The bonus was paid in 2018.  Do I report the bonus income in 2017 since it was accrued by the company and taken as a deduction, or do I report the bonus income in 2018 - the year I received it?

[Anita01 · Accepted solution]

You, as an individual, are a cash basis taxpayer, meaning you report income when you receive it.  If you were not part owner and were to receive this bonus as an employee, you wouldn't even know the bonus was accrued.  It makes no difference to your personal return if the company chose to make the entry in 2017 or 2018.  You only care when you receive it.

[accounting7]

Thanks!  That's what I thought, but someone told me that I had to, then I started questioning myself 😕