• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Invoiced in 04 and was paid in 05

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

jwhiteuwc

Junior Member
What is the name of your state?WI
Hello,

I recenlty took on some freelance work as a consultant and have 1 probably easy question.

I invoiced my client in Dec. 04, but was paid in Jan. 05. Which year do I claim this as income?

Thanks to all!!!!!!!!!
 


Snipes5

Senior Member
If you are using the cash method of accounting, it's income in '05, and if you are using accrual accounting, it's income in '04.

If you don't know that type of accounting you are using, it is probably cash, as that is the most common and easily navigated method.

In cash accounting, money is counted in income when it becomes available for your use. This would be when you received the check, not when you sent the bill.

Snipes
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top