![]() |
#1
|
|||
|
|||
![]()
Just a basic question that applies to a lot of ppl here:
Most of us don't see RB earned from December's MGR until January. BUT, it was earned in December. For which year is that money taxable; the year it was earned or the year it was received? Please save me the "talk to a cpa" responses. I have an accountant, I'm just trying to satisfy my curiosity in the midst of preparing everything for him. |
#2
|
|||
|
|||
![]()
To my best, non-binding layman's understanding, as long as the money isn't available to you (it's possible you don't even know exactly how much it is) it's not yet income. This seems to make sense, since even with immediate payment you would not get paid for December until 1/1.
However, I suspect this is borderline enough so that if you for some reason wanted to include this rakeback in your '06 taxes, you could. I doubt the IRS would complain. |
#3
|
|||
|
|||
![]()
Hey J,
I thought about this yesterday--great minds think alike [img]/images/graemlins/smile.gif[/img]. I concluded in my own thoughts that we're taxed on "INCOME" = IN-COME...money that came in. The RB that gets paid in January didn't come in until January, thus it's January income. You can't pay tax on money you don't have. I think it's logical to the point where I wont ask a CPA; I'd be very surprised if I'm wrong here. Oh, here's another thing. My Dad's a dentist with about 3,000 families in his practice. He gets millions of payments for work done throughout the year (via payment plays, medicaid, etc.), but it's only when he deposits the checks that it's his income, even though the work was done anywhere from a week to many months ago, and sometimes over a year ago. |
#4
|
|||
|
|||
![]()
Under the tax code of the United States, any taxable monies are considered to be income at the time that they are issued to you. This is why the paycheck that I am receiving Friday will in it's entirety be considered income for 2007, even though the pay period ended in 2006. You're RB monies are not considered income until they hit your account.
|
#5
|
|||
|
|||
![]()
Agreed with the previous poster. I receive a paycheck on January 2 (not the last day of December, like every other month) because of the tax implications of doing so.
|
#6
|
|||
|
|||
![]()
sweet, thanks guys.
|
![]() |
|
|