QUESTION
Deferred taxation of advance payment against services to be rendered in a future tax year
Asked on Jan 29th, 2016 on Taxation - California
More details to this question:
Please confirm if, acting as a sole proprietor in California who provides professional consulting services, I can defer tax payment on money received in 2015 as an advance against fees for services to be performed in 2016. My understanding is that I would owe taxes in 2016 on the payment received in 2015, not on my 2015 taxes.
1 ANSWER
Estate Litigation Attorney serving Redlands, CA
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No, you must report the income in 2015. As an individual, you are a cash basis taxpayer and you must report the income in the year that you receive the payment.
Answered on Jan 30th, 2016 at 2:39 PM