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ivanleegee
ivanleegee
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posted
‎03-30-2019 05:27 PM
last updated ‎March 30, 2019 5:27 PM

Unpaid Invoices At End of Year (Total Income is Inaccurate)

I am working on prepping for taxes and I have an issue in that my income shows as higher in QuickBooks (Online) than the money I actually earned. This is because as of December 31, there were multiple open invoices.

 

The invoices have been paid in the 3 months since, but that's all income that was received this year not last year. I am going to file taxes and I don't want to be taxed on money I didn't make last year.

 

I read some notes on writing off bad debt following this tutorial, but I have two issues:

  1.  I don't know if it's technically "bad debt" because it is/was collectible and it was eventually paid (the tutorial notes "Bad Debt" as "non-collectible").
  2. When I try to apply the credit memo, I can't point to the right invoices because they've been paid.

 

Any thoughts on what I should do? Should I just explain the situation to my accountant or is there something I can do in QuickBooks (Online) to get around this and make my income reflect the actual money received last year?

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Best answer 03-31-2019
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Rustler
Rustler
Established Community Backer ***
‎03-31-2019 03:31 AM

Re: Unpaid Invoices At End of Year (Total Income is Inaccurate)

Bring up the P&L and look at the basis of the report, change the basis to cash if you file taxes as a cash basis taxpayer

 

accrual basis = income and expense is yours when you save the invoice or bill

 

cash basis = income is yours when you receive it, and expense is yours when you pay the bill

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Rustler
Rustler
Established Community Backer ***
‎03-31-2019 03:31 AM

Re: Unpaid Invoices At End of Year (Total Income is Inaccurate)

Bring up the P&L and look at the basis of the report, change the basis to cash if you file taxes as a cash basis taxpayer

 

accrual basis = income and expense is yours when you save the invoice or bill

 

cash basis = income is yours when you receive it, and expense is yours when you pay the bill

Reply
ivanleegee
ivanleegee
Not applicable
‎04-01-2019 02:00 AM

Re: Unpaid Invoices At End of Year (Total Income is Inaccurate)

OMG THANK YOU SO MUCH!!!

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