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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
Payment for the invoices were received by the bank on January 14, 2019, and entered on that date into QB.
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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
Under the cash method, you include in your gross income all items of income you actually or constructively receive during the tax year. Under the cash method, generally, you deduct expenses in the tax year in which you actually pay them.
Under an accrual method of accounting, you generally report income in
the year it is earned and deduct or capitalize expenses in the year
incurred. The purpose of an accrual method of accounting is to match
income and expenses in the correct year.
It sounds like your QuickBooks accounts are set to accrual method and are bringing your income into TurboTax in the year of the sales, without regard to when payment was received. If that was your intent, everything is fine. However, if you intend to, and are eligible to, use the cash method, you will want to change your reporting preference in QuickBooks before exporting your information to TurboTax.
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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
Under the cash method, you include in your gross income all items of income you actually or constructively receive during the tax year. Under the cash method, generally, you deduct expenses in the tax year in which you actually pay them.
Under an accrual method of accounting, you generally report income in
the year it is earned and deduct or capitalize expenses in the year
incurred. The purpose of an accrual method of accounting is to match
income and expenses in the correct year.
It sounds like your QuickBooks accounts are set to accrual method and are bringing your income into TurboTax in the year of the sales, without regard to when payment was received. If that was your intent, everything is fine. However, if you intend to, and are eligible to, use the cash method, you will want to change your reporting preference in QuickBooks before exporting your information to TurboTax.
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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
QB was set to the accrual method. We don't have "inventory." We invoice for consulting services (time spent on assigned projects, primarily, with some minor incidental expenses - travel, meals - to attend business meetings with the client).
I changed the preference in QB to "cash" method, closed QB, then re-opened the program. I then imported to Turbo Tax again. The January 2019 client payments remain credited to 2018. Should I restart a new file in TurboTax?
Thanks again!
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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
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I set up a business in 2018. I received payment for my first invoices (Dec 18) in Jan 19. When I imported from QB, the amount shows as 2018 income. Is that correct?
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