Blog | Mofrad Financial Solutions

Tax Accounting Methods & Periods

Tax Accounting Methods & Periods Income Recognition, Deferrals, and Methods Valuation professionals that provide either consulting or tax reporting services will encounter taxpayers with unique questions regarding what income to report. This article provides CPAs and consulting professionals with an overview of what to report and why. In the last quarter 2015, a client I will call “Michael” came to my firm with an interesting set of facts and a question: his employer (who hired Michael as an independent contractor) offered to pay Michael’s entire compensation for 2016—in 2015. Michael wanted to know if he would be taxed for all of this double income (what his employer had paid for 2015, plus the proposed services he would perform in 2016 but be paid for in 2015) in 2015. The accountant for his colleague (who had been offered the same deal) had advised the colleague that he would be taxed for the entire amount in 2015. This independent contractor wanted to get to the bottom of the foregoing. The truth, or answer, depends on the accounting method that is elected and [...]

Take Credit for Child Dependent Care this Summer

Summer is finally here and even though you may have been looking forward to it there is a pressing and present issue you can not afford to overlook: who is going to look after your child now that school is out (presuming work is not out for you!)? Typically parents who don’t have available supervision at home like to take their children to Summer Day Camps and pay for the cost of day camps. If this applies to you, you may benefit from Child and Dependent Care Credit. The following are 10 facts to keep in mind about the Child Dependent Care Credit: The expenses must be for the care of one or more qualifying persons. A dependent child or children under age 13 usually qualify. The expenses must be related to work. Meaning you are paying for day camp in order to attend work or in order to look for work. This also applies to your spouse if you file a joint return. Your spouse meets this rule during any month he/she is a full-time student, or he/she [...]