I am self- employed and have invoiced a client but they have yet to pay me for the services I provided in November and December. Do I exclude this from my 2016 taxes?

[v-med21]

Do I exclude this from my taxes completely? If not, how do I report it?

[TomYoung · Accepted solution]

If you are a "cash basis" taxpayer - which most people are - then the act of "billing" is not reportable income to you.  It's the act of actually getting paid that creates reportable income.  Assuming you are a cash basis taxpayer you do not include the billed but unpaid income in your 2016 income tax return.

Tom Young

[v-med21]

So do I include the unpaid income in my taxes at all?

[TomYoung]

Not in 2016.  If you get paid in 2017 that's when you report the income ASSUMING YOU'RE A CASH BASIS TAXPAYER.  And if you never get paid then you never report the income.

[v-med21]

Ok great thank you!