How is this question not already answered as it's as common as it gets with service based businesses. I have income that was not yet earned using accrual method. What do i do as the IRS and state will see this large amount, but I cannot take the money as income until i preform the services.
UPDATE: the money is in an iolta account. to earn that money, new expenses arise. If i claim the money without earning it, there are not expenses and my income would be greatly overstated. I'm talking like 100 grand overstated. when the money is earned, various things must be purchased from government and it wipes out the money in reserve. how then i can claim this not earned income as income? and why is there no place in turbo tax to offset this?
