EOY Payments
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EOY Payments (by WMH [NC]) Nov 18, 2020 11:18 AM
       EOY Payments (by S i d [MO]) Nov 18, 2020 11:51 AM

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EOY Payments (by WMH [NC]) Posted on: Nov 18, 2020 11:18 AM
Message:

Seems like every year people ask about how the IRS handles EOY payment to contractors, credit cards and property taxes, etc.

So I found this. It's from 2018 but the principles still apply:

"www.accountingweb.com/tax/individuals/how-to-handle-end-of-year-payments"

From the article, about mailing payments:

"What does an adamant IRS insist they do? Put their payments in mailboxes in sufficient time for letters to be postmarked by midnight, Dec.31. I assure them that as long as they do that, the agency couldn’t care less that their checks reach recipients in 2019."

I have scheduled my tax payments through Quicken to ARRIVE by Dec. 31st.

About credit cards:

"The IRS also remains unconcerned when taxpayers use credit cards issued by third parties like American Express and Visa. It concedes that taxpayers qualify for deductions as soon as they authorize charges, even if AmEx doesn’t bill them until 2019."

So that is a common question answered.

But about store cards and commercial accounts, such as Home Depot - this is important to us for sure:

"But they might be unable to shift write-offs from 2019 to 2018 when they pay with cards issued by stores that bill them directly. No deductions, warns the IRS, until they pay the bills."

So important to pay all open invoices by EOY. Even if you have deferred billing (90 days or whatever.)

Anyway, thought it was interesting to note. --50.82.xxx.xxx




EOY Payments (by S i d [MO]) Posted on: Nov 18, 2020 11:51 AM
Message:

Thanks for the reminder. I try to always make sure that utility bills, outstanding work invoice, etc always get paid on or before Dec 28th so I can get the deduction TODAY vs. waiting another year.

Ironically, I bet most of the contractors we owe money too are hoping we pay Jan 1st so THEY can wait to report the income until April 15th, 2022!

Regardless, I'm the type who believes in paying ASAP because I like my contractors to know I value their work and also to get the bird in the hand. We are likely going to be changing administrations in Jan 2021, and B seems dedicated on undoing everything that T has done, which included expanding a lot of tax cuts to favor businesses and investor, so I would not be surprised if certain "loop holes" were removed and/or limited. Get it while you can! --107.216.xxx.xxx



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