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My business had a down year in 2017. As a result, my W2

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income is substantially lower than...
My business had a down year in 2017. As a result, my W2 income is substantially lower than it was in 2016. I need to prove that my income was similar to 2016. Is there a way to increase your taxable or non-taxable (overall) income? If I have a post dated check from the business to myself from 2017 that I haven't cashed, yet, will that work? What about incremental payments paid from the company back to me in 2018 for 2017 income?Disclosures: I have not filed business or personal taxes for 2017, yet. 2018 is looking to outperform 2017.
Submitted: 1 month ago.Category: Finance
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Answered in 12 hours by:
3/20/2018
Financial Professional: Shan-Nel Simmons, Enrolled Agent replied 1 month ago
Shan-Nel Simmons
Shan-Nel Simmons, Enrolled Agent
Category: Finance
Satisfied Customers: 43
Experience: Tax Pro and Founder at Nel's Tax Help,LLC
Verified

Do you report your income on a cash basis (income reported when paid) or accrual basis (income reported when earned)? I ask because if you report your income on an accrual basis and you have valid reason to invoice customers for services (or products) prior to receiving their payment, that is one way you can increase your income for the tax year.

Another option, if you have capital expenditures, you should depreciate them instead of claiming the section 179 deduction if they qualified.

Lastly, deductions/expenses are an election. If you do not want to claim your expenses, you do not have to do it. Basically your tax return will not reflect your true financial situation for 2017. But as long as all the income is reported, the IRS will not care if you did or did not claim deductions if you do not want to do it.

Otherwise, since we are now in 2018, we cannot do anything to change the past. If none of the above options will help you or is not something you want to consider, at this point, there is very little that can be done to increase income from the past.

I hope this helps. Please leave a five star rating. Have a great day!

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Shan-Nel Simmons
Shan-Nel Simmons
Shan-Nel Simmons, Enrolled Agent
Category: Finance
Satisfied Customers: 43
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Experience: Tax Pro and Founder at Nel's Tax Help,LLC

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