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Can I claim an expense on this year's taxes that was billed in 2016, but I didn't pay until 2017?

I received the bill for my December, 2016 lawn service company in January, 2017. I paid the bill on January 17, 2017. Can I claim the expense on my 2016 taxes, or do I claim the expense on the 2017 taxes?

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It depends whether you are a cash-basis taxpayer or an accrual-basis taxpayer. Cash basis taxpayers record income when received and record deductible expenses when paid (in your case, bill deductible in 2017). Accrual basis taxpayers record income when billed and deduct expenses when incurred (this would be where you could deduct the bill in 2016). So you need to know whether you are reporting on cash basis or accrual basis. Should be a checkbox on your tax return to tell you which one you are reporting under. Good luck - let me know if I can help further.


You claim what you spent, not what you were billed, so 2017.

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