"Mike" <rownder[at]hotmail.com> wrote:

- quote -

2003

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Boston, MA 02109

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JSmith9543 wrote:

- quote -

If you could have deposited it into your bank's ATM and
received instant credit for the full amount, then 2003 is
correct. If the check were sufficiently large that you
could only get partial deposit credit immediately (some
banks impose this limit), then only that amount would be
2003 income.

The fact that the employer post-dated the check doesn't
matter with regard to "constructive receipt." However,
should the IRS audit him, he will have a hard time
justifying a 2003 deduction for a 1/1/2004 check.

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- quote -

Exactly. Even tho you had the check in your hands, it was
impossible to cash until 2004. Your employer needs to see a
good tax pro before he makes real mess of his (and YOUR)
taxes.

Helen, EA in PA
Member of The Tax Gang
Immediate Past President, PA Society of Enrolled Agents

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Yes - this is exactly what my boss is trying to do (I work
for a small S corp.). Our normal payday is every other
Friday - would have been 1/2/04. My boss 'mysteriously'
handed me my check on 12/31 - end of day (banks were
closed)!!! NOW he claims he can include this in 2003
income? He says because the time I 'worked' was in 2003 -
then it counts towards 2003. Now, what confuses the issue
even more - the check was DATED January 1, 2004 - and I
cashed the check 1/2/04 - to me - this MUST count towards
2004 income not 2003 - Right?

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- quote -

.....And if it were held for pickup, then it WAS available
(before 12/31)....

- quote -

I do agree that there has to be timely clearing of the
checks, but if the delay is only two days (i.e. 12/31
to 1/2), how is anyone going to be able to tell?

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- quote -

It's not "constructive receipt" because CR requires the
opportunity to have control. It's the "Mail Box Rule".
If you mail it on or before 12/31, then you paid it that
year.

A very simple financial statement fraud (which only applies
to companies) is to write the checks to pay as many expenses
as possible on the last business day of the year and then
stick many of them in a drawer until you have the funds.
Auditors look for this.

Dick

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- quote -

Well, it's like this.

I was actually looking at this clients check stubs for Dec
this very afternoon.

If he's written the checks on Dec 31 and does NOT mail them,
and does NOT notify they're ready for a same locale payee to
pick up, then they are NOT deductions in 2003.

Except for the fact he's on the accrual basis for purchases,
so therefore any checks to suppliers get put temporarily in
accounts payable and reversed on January 1st.

The check for the 2000$ rent he THINKS he gets credit for,
he does not, cause rent is rent, and we know the rules on
that. His last rent payment cancels out his previous
year's "prepaid rent" on the books.

As for operating expenses, they just aren't counted till
next year.

Does that help?

Cheer$,
Harlan Lunsford, EA n LA

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Harlan Lunsford wrote:
- quote -

Why would "holding for pickup" make a difference -
i.e. "constructive receipt?" (Not this again) ;-)

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- quote -

When it hit the dental mailbox has nothing to do with
anything for the OP. The OP mailed it in 2003, and that is
the date. Even if he mailed it on 12/31, it would still be
a 2003 deduction.

Helen, EA in PA
Member of The Tax Gang
President, PA Society of Enrolled Agents
Campaigning for NAEA Board of Directors - Looking for YOUR vote

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"Mike" <rownder[at]hotmail.com> wrote:

- quote -

It is deductible in 2003

Craig W. Smalley, E.A.
Smalley & Company, P.A.
www.smalleynco.com

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"Mike" <rownder[at]hotmail.com> wrote:

- quote -

If you properly mailed it to the correct address with
appropriate and adequate postage on it, the dentist was paid
in 2003 despite the fact they didn't get it until 2004.

Wayne Brasch, CPA, M. S. Taxation

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Mike wrote:

- quote -

As long as you mailed the check, it's okay. I say that,
because I have a couple of clients who write out a bunch of
checks every year about that time, so I have to confirm with
each one, if each check was actually mailed or held for
pickup.

Cheer$,
Harlan Lunsford, EA n LA

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"Mike" <rownder[at]hotmail.com> wrote:

- quote -

If the check was in the dentist's mail box on the 31st, take
it in 2003. It doesn't matter if he didn't retrieve his
mail and go to the bank, he could have.

Don in Colorado

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Mike asked:

- quote -

When you mailed it, you can count it as having been paid --
just as you can mail your tax return on April 15 (most
years) and you will have met the "timely filing"
requirement, even though the government won't receive your
check for several more days.

Your dentist, may do one of two things: If on accrual, he
could count it as 2003 income -- or, if on a cash basis, he
can count it in 2004.

The same thing applies for credit card obligations. For
example, if you paid a tax-deductible charge by credit card
on Dec 31, even though you might not even be billed for it
until late in January, and therefore won't actually write
the check until early February, you will have constructively
"paid" the bill in December, when - by contract - you
committed your money.

Bill

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"Mike" <rownder[at]hotmail.com> writes:

- quote -

It's a 2003 deduction.

Phil Marti
Topeka, KS

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I mailed my Dentist a check for $2k on the the 12/30,
however the dentist office was closed and the check was not
cashed untill 1/2. Can I use the payment as a deduction for
2003 or does it have to count towards the new year? I
appreciate and thank any responses in advance.

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