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I'm filing year end tax form 1120S for a small corporation on a cash basis. If a paycheck was entered on the day before year end but not cashed before year end and payroll taxes were not paid before year end, is it reported on the next year's tax return or the year it was entered in the books?


Expert Edward Wilmsen's Answer:

 In the tax law there is somthing called "constructive receipt" Which means that when you receive payment that is the year it becomes taxable. In this case it is taxable in the year the check was dated and received.

Edward Wilmsen, CPA


30 yrs experience

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