Posted by Mike Photon on 8/30/06 6:00pm
Msg #142325
Journal entry for non-payment
If you agreed to a fee and did the signing, but if the SS didn't pay you the money, do you still put the expected fee in the journal? I'm wondering if you'd have to pay taxes on top of getting stiffed.
Or do you write it off as bad debt?
| Reply by PL on 8/30/06 6:28pm
Msg #142340
Mike, you don't have to pay taxes on money you didn't recieve. Just for giggles has the signing service gone belly up? If not then you don't have a bad debt, you have a challenge to collect what you are owed. You can go the court route, or you can take pleasure in only stating the truth about how they did you wrong on every web site that caters to notaries. I would suggest you do both, go to court and then every week or so remind everyone how this certain service did you wrong. You may never collect a dime, but you will get the satisfaction that others have not suffered the same fate and that those rascals that did this suffered along with you in possible lost business. Good luck on your challenge.
| Reply by Brad_CA on 8/30/06 6:31pm
Msg #142343
Mike you do not pay taxes on income not received. I do not enter the Notary fee in my journal until after I get paid. Speak to a tax professional who will be able to advise you on taking it as a loss on your taxes. Hope that helps.
| Reply by SharonMN on 8/30/06 7:04pm
Msg #142349
A lot of people find tax regulations very mysterious, and there is a very good reason for that - they are. I'm not a tax attorney or an accountant. However, as a business owner, you can use this basic, simplistic guideline to help you understand the tax laws: If you put money INTO your pocket, it's income. If you take money OUT of your pocket for business related expenses, it's a deduction. So unpaid invoices aren't a deduction or a loss, they are just not income. You should still be able to deduct your mileage and other costs for this job, though. Income minus deductions = the amount you have to pay tax on.
| Reply by JM_NY on 8/30/06 9:16pm
Msg #142382
Journal entry for non-payment
Sharon explained it exactly the way I learned it in a tax class. You can't deduct something you never had. All expenses are deductable and any expenses paid to get your invoice paid.
| Reply by MelissaCT on 8/30/06 10:36pm
Msg #142405
Re: I think it depends
on whether you work on accrual or cash basis. Accrual method allows for writ-off of bad debt, since you claim income upon accrual, not payment received. Cash basis, you only claim what you've received. At end of year, cash basis also counts checks that have come in but have not been cashed (you can't hold your end-of-year income until Jan 1st...).
Someone with more tax background, please verify, I only have my certificate in accounting 
BTW, this is not tax or legal advice. For specifics, check the irs website and/or your tax advisor.
http://www.irs.gov/businesses/small/article/0,,id=98680,00.html -- Accounting Periods and Methods
|
|
