I made a purchase online for a business expense for which the date of order at the top of the invoice was December 30/2017, and I supplied my credit card information on this date. However, my card was not charged until the order was shipped. The shipment took place on January 1/2018 and that is the date of transaction that shows at the bottom of the invoice.

For tax purposes, would I report this expense for the year 2017 (date of order), or the year 2018 (date of transaction)?

  • 5
    location always helps to answer tax questions. – mhoran_psprep Jan 1 '18 at 18:36

Michael is correct. The "all events" test determines when the transaction occurred for tax purposes. Paying for it with credit satisfies that. Consider - if you don't pay your credit card that issuing company does not have a right (or even a lien) to the item you purchased and the seller certainly doesn't have to refund to the credit company (but card issuer can collect from you on any and all assets you may have otherwise).

| improve this answer | |

You would report this expense as taking place on December 30th, 2017 because that is the date on which you entered into a contractual agreement to exchange product for payment. On that date you legally had ownership of the product and therefore it was in your "inventory" (I'm not sure what it is you bought but you get the idea).

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.