I signed up for and paid for a business consulting program in 2016 but the training will take place in 2017. How do I report the expense?

[Patrice · Accepted solution]

It depends on whether or not your operate your business on a cash basis accounting or accrual basis accounting. If you use the cash basis (which most popular among small businesses and self employed individuals) then you would report the expenses on your 2016 tax return. 

Under the cash basis of accounting...

1. Revenues are reported on the income statement in the period in which the cash is received from customers.
2. Expenses are reported on the income statement when the cash is paid out.

Under the accrual basis of accounting...

1. Revenues are reported on the income statement when they are earned—which often occurs before the cash is received from the customers.
2. Expenses are reported on the income statement in the period when they occur or when they expire—which is often in a period different from when the payment is made.

To enter this in Turbo Tax Self-Employed (0nline) or Turbo Tax Home & Business (desktop):

1. Start under the Business tab
2. Click I'll choose what I'll work on
3. In the "Business Income and Expenses" section, next to "Profit or Loss from Business", click Start or Update
4. The next screen will ask "Did you have any income and expenses for a business in 2015?". Answer Yes.
5. Follow the interview until you reach "Let's confirm your business info". Verify everything is accurate, then Continue
6. You will be redirected to your business page. In the "Business Income" section, click Start or Update
7. Next to "General Income", click Start or Update
8. Manually enter a description and amount for this income here