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weddings from 2012, buying the album in 2013.. Taxes?

DblDrgn
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p.1 #1 · weddings from 2012, buying the album in 2013.. Taxes?

I have several weddings from 2012 that still need albums. Just wondering what you guys do when the job happened in 2012, the client pays in full during 2012, but the photographer (me) doesn't complete and buy the album until 2013... Is it still possible to use the album purchases to offset my taxable income in 2012? I have about 6 albums to order, and that would certainly make a difference for offsetting my taxable income from 2012.

...and before anyone suggests it, I have set up my appointment with my CPA, but wanted to get opinions here first.

Jan 02, 2013 at 03:55 PM

Dave_EP
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p.1 #2 · weddings from 2012, buying the album in 2013.. Taxes?

The album is an accrued liability that should be accounted for in your 2012 accounts with any adjustment made in 2013 if needed.

Jan 02, 2013 at 04:07 PM

DblDrgn
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p.1 #3 · weddings from 2012, buying the album in 2013.. Taxes?

Thanks Dave that's what I wanted to hear.

Jan 02, 2013 at 04:09 PM

MBMK
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p.1 #4 · weddings from 2012, buying the album in 2013.. Taxes?

DblDrgn wrote:
...and before anyone suggests it, I have set up my appointment with my CPA, but wanted to get opinions here first.

Let us know what your CPA says. I'd assume that any purchased made on 2013 should be in 2013 book.

Jan 02, 2013 at 04:13 PM

Prettym1k3
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p.1 #5 · weddings from 2012, buying the album in 2013.. Taxes?

We do simple accounting, and would count that income as a purchase/income line item for 2013. Simple as that.

As to date, our tax guy hasn't mentioned anything about it and he's pretty detail oriented.

Jan 02, 2013 at 07:48 PM

DblDrgn
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p.1 #6 · weddings from 2012, buying the album in 2013.. Taxes?

I just had a chat with my CPA, he basically confirmed what Dave_EP said, and it is possible to set up the album purchases as accrued liability, they will offset my 2012 income.

Jan 02, 2013 at 07:49 PM

sboerup
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p.1 #7 · weddings from 2012, buying the album in 2013.. Taxes?

Well taxes are going up (and just did) for 2013, so I'd want more expenses in 2013 than in 2012 at this point.

Jan 02, 2013 at 08:11 PM

qwyjibo
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p.1 #8 · weddings from 2012, buying the album in 2013.. Taxes?

It depends if you use cash or accrual accounting. While sizable businesses are required to use accrual accounting, small businesses can use either. However, you have to stick to one methodology and recognize income and expenses in the same way and not change back and forth from year to year.

Jan 02, 2013 at 08:22 PM

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