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Level 1
Apr 16, 2023 9:18 PM UTC
Question

Client payments arrive after Dec 31st

I'm in a new scenario this year and I'm unsure how to count client payments. One in particular. 

 

I have a client that was invoiced June 2022. I received their payments in the mail Jan 3, 2023. The checks they sent are dated Dec 27, 2022 and the postmark was Dec 30, 2022. So I had no idea they were even paying finally after being 6 months late let alone now which year does this count as income for my business? 

 

Since it arrived in 2023 does it count as 2023 income or because they were invoiced in 2022 and dated their checked Dec 27, 2022 it counts as 2022 income and needs to be part of the 2022 tax filing?

1 reply

MaryK4
Alumni - Intuit
Apr 16, 2023 9:46 PM UTC

If you are a cash taxpayer, you will report the income in 2023 because that is when you received the income.  See What is the accrual method of accounting? - TurboTax Support.

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