Tax Reporting for Year-End Freelance Income with Delayed Payments

[Nancol]

I'm a freelancer who primarily uses cash basis accounting, receiving most payments 30 days after completing assignments. For example, if I complete work on December 15, 2024, but don’t receive payment until January 15, 2025, should I report this income on my 2024 or 2025 tax return? Does the date of payment impact when I need to declare the income, even if the work was done in the previous tax year?

[dev145]

Hi Nancol, 

Since you are reporting all income and expenses on cash basis, you will report when you receive payment (Cash, Check or CC). That means if you invoiced on 15th but did not receive payment until next year, you will report income from that invoice in the following year when you actually receive payment. 

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