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dhouston-thehgso
September 18, 2024
Question

How do I Classify a $12k Payment for Future Good and Services?

  • September 18, 2024
  • 1 reply
  • 0 views

I Invoiced and received a payment for $13,000 from a Client who wants me to hold it until they decide what - if anything - to do with it next year.  When they issue me my 1099 I don't want to have to pay taxes on the amount I'm sitting on because it may or may not be spent or credited next year, or it may go to pay fees or hard costs, etc.  How to I treat this in QB Self-employed so it doesn't count as income until / only if it actually gets spent next year?

1 reply

J
JustinDaveC
September 19, 2024

Allow me to help you categorize and record the pre-payment you've received without affecting your accounting records, dhouston.

 

When you categorize transactions in QuickBooks Self-Employed (QBSE), each transaction is placed on your Schedule C, allowing you to have an organize track of your income and expenses.

 

Since this transaction is intended for future use, I highly recommend consulting your accountant's advice throughout this process to accurately record this transaction. They can review your books to ensure that the payment you have received will not be included in your estimated tax.  

 

I've included an article about categorizing transactions in QBSE. This helps you ensure your books are accurate: Schedule C And Expense Categories.

 

Moreover, refer to this article to run reports and download transactions: Export transactions and get reports in QuickBooks Self-Employed.

 

Please don't hesitate to comment below if you have other transaction-related concerns and questions about managing your QBSE. I'll be willing to help at any time. Stay safe!

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