Author Topic: Question about tax preparation and side income  (Read 1166 times)

KidneyMD

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Question about tax preparation and side income
« on: January 18, 2015, 11:30:30 AM »
I'm starting to gather materials for tax season and I had a side job as a teaching assistant in December for the physical diagnosis course at our medical school. I have yet to receive the initial payments for doing this work (it takes awhile for the first check to process) but what I wanted to figure out was whether I should be including this income with my 2014 taxes (since I did the work in December) or for next year if the paycheck won't be received until this month.

Cheddar Stacker

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Re: Question about tax preparation and side income
« Reply #1 on: January 18, 2015, 11:37:50 AM »
You are cash basis. Income is claimed when paid/received and expenses are deducted when paid. Other than IRAs and a few other small exceptions.

NoraLenderbee

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Re: Question about tax preparation and side income
« Reply #2 on: January 18, 2015, 11:40:44 AM »
Generally, you go by what they call "cash basis"--you count the money in the year you get it. In your case, since you haven't yet gotten paid for the work, you don't count it as 2014 income. You'll count it in 2015. The same would apply to expenses such as business expenses or medical bills--you count them in the year you pay them.

This applies to individuals with side jobs and straightforward returns. Businesses are different, as are complex returns.