Oh Tommmm! Water Bill Question!

[legomom922]

The bill was supposed to have paid no later than Nov 1. They got it on Nov 3 and told me that since they had just closed out their records for the yr, that they would be adding the $150 water bill to our tax bill and they sent back my ck.

I assume I dont include this water bill as t/s because it's now been added to the tax bill for 2011? So when it comes time, do I just claim t/s on my whole tax bill even though it includes the water too?

Tom, can you help me on this one?

[TomCopeland]

water and t/s%

Sounds like you paid them in November. They returned the check and added it your bill that you paid in 2011. If that's the case, don't include the November payment as an expense in 2010 (because it was returned before the end of 2010 - true?). Then claim the t/s% of the bill you paid in 2011 even though it include utilities used in 2010.

[dEHmom]

This was on the Canadian tax site, I pulled it off. I know Tom has already answered but here is another way to read it


As a self-employed individual, you must report business income using the accrual method of accounting.

With this method, you:

* report your income in the fiscal period you earn it, regardless of when you receive the income; and

* deduct expenses in the fiscal period you incur them, whether you paid them in that period or not. Incur usually means you either paid or will have to pay the expenses.

For more information, see Guide T4002, Business and Professional Income.