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Level 1

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?

Solved
Best answer March 31, 2019

Best Answers
Level 15

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

View solution in original post

2 Comments
Level 15

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

View solution in original post

Level 1

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

OMG THANK YOU SO MUCH!!!

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