Adsense and Taxes

Would Google count December...

[jquick]

I am not quite sure about this, but I am wondering if Google counts the income earned this month (December) for the year 2004. Or would they count the income earned for the year 2005 because we wouldn't receive the money/cheque until 2005.

Thanks,
JQ

[ganderla]

Your situation might be different, but here is how it works for me:

If I get the check before the end of the year, I have to deposit it and count it towards 2004. If I get it in 2005, then it is 2005.

I talked to my accountant the other day and she said how important it is not to hold the check over to 2005 if I get it in 2004. that could spell real trouble.

[icedowl]

As far as I know it is normally based on the date that the check is written, not when the income was actually earned. A check that is dated during December 2004 will be income for the 2004 calendar year, and a check dated in January 2005 will be income for the 2005 calendar year.

[europeforvisitors]

If you live in the U.S., both you and the IRS will receive a Form 1099-MISC statment from Google that shows how much you should declare as AdSense income (assuming that you've earned more than $600 for the year). Use that figure when calculating your taxes.

[The Contractor]

Income for the tax year is based on the year you actually receive the income. Otherwise - If you receive payment in January 2005 for work/advertising etc performed in December 2004 - it goes on your 2005 tax return.

Double-check your 1099 from Google, but I'm sure it will be accurate. If not base it on what/when it was received.

[jquick]

Thank you all for the response!

[level80]

It depends on your accounting method used. If you account for things when payment is received and paid in you will give one answer. If however you account it when it is earned eg December's earnings in December it's another.

Even if December's cheque is not paid in in December - you can still account for it as you will know the amount it will be.

However as pointed out earlier it depends what tax authority/ies you come under.

It also depends over what period your accounting year runs.