How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29963
Experience:  Taxes, Immigration, Labor Relations
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

I was advised that one can recognize income in the 2015 tax

Customer Question

I was advised that one can recognize income in the 2015 tax year for income received until march 15, 2016.
Sounds strange, never heard this and have filed 35 years of returns. Did I miss something?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Hi Tom,

I am not sure where you got such information...

Generally that looks as misunderstanding, but if you provide the source of such information or more details - I might be able to analyse.

There are two basic types of accounting methods - cash method and accrual method. An accounting method is a set of rules used to determine when and how income and expenses are reported.

Expert:  Lev replied 1 year ago.

Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. If you receive property or services, you must include their fair market value in income.

Under an accrual method of accounting, you generally report income in the year 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.

Most individuals and many sole proprietors with no inventory use the cash method because they find it easier to keep cash method records. However, if an inventory is necessary to account for your income, you must generally use an accrual method of accounting for sales and purchases.
If you are using case accounting method - when you will prepare your 2015 tax return - you will include into Gross receipts all payments you receive during 2015. If a payment will be received on Jan 2, 2016 - that amount will be included into 2016 tax return.