"If you use the accrual method, report income when you earn it and deduct expenses when you incur them even if you do not pay them during the tax year. Accrual-basis taxpayers are put on cash basis for deducting expenses owed to a related cash-basis taxpayer. Other rules determine the timing of deductions based on economic performance."
???? How the heck should I know whether or not another business uses the cash method? O.O I'm afraid to put this thing in the mail.
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I am not an accountant.
Date: 2007-04-05 09:45 pm (UTC)"If you use the accrual method, report income when you earn it and deduct expenses when you incur them even if you do not pay them during the tax year. Accrual-basis taxpayers are put on cash basis for deducting expenses owed to a related cash-basis taxpayer. Other rules determine the timing of deductions based on economic performance."
???? How the heck should I know whether or not another business uses the cash method? O.O I'm afraid to put this thing in the mail.