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Subject Author Date
Taxable income: when accrued or when paid Steve 01-07-2007
Posted by Seth Breidbart on January 8, 2007, 10:37 pm
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> I just received my last paycheck of 2006 in 2007. My
> company has reset all of my totals and started taking out my
> 401K contributions again (already at maximum contribution
> for 2006). I thought that taxes were paid on wages earned
> in a year not paid in a year. Is this the correct way to
> report my income?

For a cash-basis taxpayer, what counts is the date paid.

Seth

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
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Posted by Victor Roberts on January 8, 2007, 10:37 pm
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> I just received my last paycheck of 2006 in 2007. My
> company has reset all of my totals and started taking out my
> 401K contributions again (already at maximum contribution
> for 2006). I thought that taxes were paid on wages earned
> in a year not paid in a year. Is this the correct way to
> report my income?

What is the date on the check?

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Mike Wellman on January 8, 2007, 10:37 pm
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Steve wrote:

> I just received my last paycheck of 2006 in 2007. My
> company has reset all of my totals and started taking out my
> 401K contributions again (already at maximum contribution
> for 2006). I thought that taxes were paid on wages earned
> in a year not paid in a year. Is this the correct way to
> report my income?

Yes, payroll reporting is always on a cash basis. For
financial reporting, they may well have accrued expenses for
2006, but that is not relevant to your paycheck.

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by JD on January 26, 2007, 5:58 am
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Steve wrote:

> I just received my last paycheck of 2006 in 2007. My
> company has reset all of my totals and started taking out my
> 401K contributions again (already at maximum contribution
> for 2006). I thought that taxes were paid on wages earned
> in a year not paid in a year. Is this the correct way to
> report my income?

Use the W-2 values otherwise you will have to request the
employer to change the W-2.

If you do not use the W-2 information the IRS WILL COME
KNOCKING on your door. they do match the W-2's to the 1040
that you file...

Jerry Doblie
Jerry Doblie, CPA; MS Tax
14045 Sunnyside Ave N
Seattle, WA 98133
206-365-0143

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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