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Get your taxes done using TurboTax
If your receipts are under $29 million, you can use the cash method regardless of your inventory.
The difference between accrual and cash is when you record your income and expenses. For instance, if you sent an invoice to a customer on December 31, 2024, that was paid on January 3, 2025. Under accrual method you would count that income in 2024 (when you earned the income), but under the cash method that income would be counted in 2025 (when you actually received it).
Same with expenses, expenses are counted when you order the supplies under accrual, but expenses are not counted under the cash method until you actually pay for the expense.
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March 7, 2025
10:48 AM