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Anonymous
Not applicable

Switching to cash accrual for taxes

I am being charged taxes on the full amount of the invoice that was only partially paid. I am thinking I need to switch to a cash basis. How do I go about changing my account to that? TIA

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Best answer 04-16-2019

Accepted Solutions
Content Leader

Re: Switching to cash accrual for taxes

Thanks for posting in the Community, @Anonymous. I'm here to provide clarification on changing from accrual to cash basis.

 

You can update the settings to reflect a cash basis with the following steps:

 

  1. Select the Gear icon.
  2. Choose Account and Settings.
  3. Click Advanced.
  4. Select the Pencil icon in the Accounting section.
  5. From here you can choose Cash in the Accounting method drop-down.
  6. Click Save.
  7. Select Done.

 

For additional insight into this process, as well as how to change individual reports, I recommend the following article: Change the accounting method.


Naturally, the timing of when revenue and expenses are recognized will impact financial reporting and tax forms. Additionally, there can be necessary requirements to ensure compliance with regulations for adopting a different method. As a result of this, you may wish to consider reaching out to your accountant to ensure the optimum setup for your business.

 

I'm confident that this will get you started in the right direction.

 

Should you have any questions, you can always find me here. Hope you have a great day. 

View solution in original post

4 Comments
Content Leader

Re: Switching to cash accrual for taxes

Thanks for posting in the Community, @Anonymous. I'm here to provide clarification on changing from accrual to cash basis.

 

You can update the settings to reflect a cash basis with the following steps:

 

  1. Select the Gear icon.
  2. Choose Account and Settings.
  3. Click Advanced.
  4. Select the Pencil icon in the Accounting section.
  5. From here you can choose Cash in the Accounting method drop-down.
  6. Click Save.
  7. Select Done.

 

For additional insight into this process, as well as how to change individual reports, I recommend the following article: Change the accounting method.


Naturally, the timing of when revenue and expenses are recognized will impact financial reporting and tax forms. Additionally, there can be necessary requirements to ensure compliance with regulations for adopting a different method. As a result of this, you may wish to consider reaching out to your accountant to ensure the optimum setup for your business.

 

I'm confident that this will get you started in the right direction.

 

Should you have any questions, you can always find me here. Hope you have a great day. 

View solution in original post

Anonymous
Not applicable

Re: Switching to cash accrual for taxes

Thank you so much @DavidSC ! I was able to correctly make the change using your steps. Thank you for taking the time to help me out!

Established Community Backer ***

Re: Switching to cash accrual for taxes

@Anonymous 

That's just this year. Next year it may be the other way around. You can't just change the method any time to avoid tax. There's a process

Content Leader

Re: Switching to cash accrual for taxes

You're certainly welcome, @Anonymous. 

 

As previously mentioned, you may still want to consider reaching out to your accountant to ensure that this is best setup. Also, as @Malcolm Ziman referenced, there is a process to this and it is important to ensure that you have the optimum setup for this year and in the future. Additionally, there can be rules associated with accounting methods in order to ensure compliance, such as if your business uses merchandise for example.  

 

The Community always has your back, so please feel free to drop by anytime. Cheering you to continued success. 

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