Patrick Michael Posted January 19 Report Share Posted January 19 Couldn't find a good answer on this Googling it. Client paid their 2024 property taxes on 12/31/23 (tax warrant had been issued) via a EFT. Payment did not clear the bank until 1/4/24. No issue for the 1040 since they take the standard deduction, but NY decoupled so they do itemize for the state. Are EFT's treated similar to checks where the the date it was initiated is considered the payment date, not when the money was actually withdrawn? Quote Link to comment Share on other sites More sharing options...
Lee B Posted January 19 Report Share Posted January 19 I have a similar situation with a tax payment that I scheduled with the Oregon Dept of Revenue to be paid on Thursday December 28th ( confirmation saved ). However it didn't clear my checking account until Tuesday January 2nd. I am going to treat just like an outstanding check. 3 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted January 19 Report Share Posted January 19 Likely no one cares. Used to have a client who would hold incoming checks for months at the end of their year. Tens of thousands of dollars. Passed audit just fine several times. Likely the same the other way (outgoing checks/payments). 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted January 19 Report Share Posted January 19 Agree with Lee. If the taxing agency gave your client credit for the payment being made on 12/31/23, then I'd use that date. Depending on which type of electronic payment and how it is processed can affect the timing of withdrawal. 1 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 19 Report Share Posted January 19 Just now, Medlin Software, Dennis said: Likely no one cares. Used to have a client who would hold incoming checks for months at the end of their year. Tens of thousands of dollars. Passed audit just fine several times. Likely the same the other way (outgoing checks/payments). My first experience with an IRS audit was in college. Doctor went to India for the holidays for the entire month of Dec. Came back to a stack of checks in his mailbox. Payers issued 1099s for the amount paid including the checks not cashed. IRS assessed for the entire amount. CPA I was working for claimed the checks were not received until he came back from India in January. IRS asserted that DR had staff that could have deposited the checks, and just because he did not trust them to make the deposits, the checks were still in his possession. Audit loss for the client. Over $150K added to the return, with penalties and interest. Tom Longview, TX 3 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted January 19 Report Share Posted January 19 Interesting Tom. In the case of my former client, they are a corp, and did not get 1099's, and if they did, I am certain they would have refuted them as being not required, so not valid. This was 20 years ago... The owners were the type who enjoyed the grey, which is one of the reasons they are an ex client. The mass 1099 deal (blanket sending, even when not required) is a royal pain, and about to get worse. Even though my highest ticket is under $600, I get requests for ID from a few each year, which I toss. Usually from a government or quasi government entity, which has a policy of 1099 to all. It is even easier for me to refuse now, as I point out they paid by card, which my merchant account will 1099 me for already. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted January 24 Report Share Posted January 24 On 1/19/2024 at 9:48 AM, Medlin Software, Dennis said: have a client who would hold incoming checks for months at the end of their year. Tens of thousands of dollars. Passed audit just fine several times Clearly income in year received. Hard to imagine agent missed that on multiple audits. On 1/19/2024 at 9:59 AM, Medlin Software, Dennis said: did not get 1099's, and if they did, I am certain they would have refuted them as being not required, so not valid. But that does not make any difference, doctrine of constructive receipt rules since he had control of the funds on 12/31, regardless of 1099s. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted January 24 Report Share Posted January 24 On 1/19/2024 at 9:31 AM, Lee B said: However it didn't clear my checking account until Tuesday January 2nd. I am going to treat just like an outstanding check. And ODR will treat as paid on 12/28 as well. 1 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted January 24 Report Share Posted January 24 13 hours ago, DANRVAN said: Clearly income in year received. Hard to imagine agent missed that on multiple audits. But that does not make any difference, doctrine of constructive receipt rules since he had control of the funds on 12/31, regardless of 1099s. Was not missed at all. While only third hand, the person is the type who would have shown the stack of envelopes, if not the actual checks. CR is great for PR tax liability and reporting, but at least the persons reviewing this particular person was not bothered. Let's play. If the envelopes were in a POB for months, how is CR going to be proved? No requirement that I know of says someone must check their POB daily or even weekly. Dec could be a busy time for the business, and no one was processing mail daily? Is that against the law? Skippy with a fresh sheepskin as well as the year vet retiring at end of day, sleepwalking through the audit, would have seen the wild differences in income come Jan. My own income is relatively nil 10 months of the year, for 40 years now, and causes no issues other than dealing with unequal quarterlies. Quote Link to comment Share on other sites More sharing options...
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