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seth-powers
New Member

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

For example, if I send in a mortgage payment by check on 12/28/15 and it is not actually cashed until 1/3/16, for what year do I claim that as officially "paid"?
1 Best answer

Accepted Solutions
AnnaB
New Member
Intuit Approved!

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

It is considered paid on the date you write and mail the check - in order for a given date to be considered the mailing date, you have until midnight local time to put the check in the mailbox.  Once the check has been mailed, you have constructively given it up and the expense has been paid for tax purposes.

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5 Replies
AnnaB
New Member
Intuit Approved!

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

It is considered paid on the date you write and mail the check - in order for a given date to be considered the mailing date, you have until midnight local time to put the check in the mailbox.  Once the check has been mailed, you have constructively given it up and the expense has been paid for tax purposes.

Needtoknow
Returning Member

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

What about online banking?  Is is deductible on the day you tell the bank to write and send it, or is it on the day they actually say they are going to send it?

Bees
Level 7

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

If you authorize payment prior to year end it is in that year even if bank processes it later.  

Was this a Quicken question or a Turbotax question?  Just curious since I think the help forums have just  been merged.

Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.
Carl
Level 15

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

The item is paid on the date you lose control of the money. It's that simple.

When you write a check, the day you drop that check in the mailbox you have effectively lost control of that money. The item is paid as of that date. Doesn't matter if you write the check on Dec 31st. If the date on that check is Dec 31st and you mail it on Jan 2nd, you effectively "lost control" of that money on Dec 31st. Doesn't matter if it two more months before the recipient actually cashes the check.

 

Needtoknow
Returning Member

When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

It was a tax question.

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