When calculating expenses and deductions, when are items considered "paid" for, the date of charged credit or written check or the date money is withdrawn from the bank?

Forum|Forum|6 years ago
June 5, 2019
3 replies
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For example, if I send in a mortgage payment by check on 12/28/15 and it is not actually cashed until 1/3/16, for what year do I claim that as officially "paid"?

TurboTax Self Employed Online

Best answer by AnnaB

It is considered paid on the date you write and mail the check - in order for a given date to be considered the mailing date, you have until midnight local time to put the check in the mailbox. Once the check has been mailed, you have constructively given it up and the expense has been paid for tax purposes.

AnnaBAnswer

Employee

Needtoknow

What about online banking? Is is deductible on the day you tell the bank to write and send it, or is it on the day they actually say they are going to send it?

Bees

Employee

If you authorize payment prior to year end it is in that year even if bank processes it later.

Was this a Quicken question or a Turbotax question? Just curious since I think the help forums have just been merged.

Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.

Carl11_2

Employee

The item is paid on the date you lose control of the money. It's that simple.

When you write a check, the day you drop that check in the mailbox you have effectively lost control of that money. The item is paid as of that date. Doesn't matter if you write the check on Dec 31st. If the date on that check is Dec 31st and you mail it on Jan 2nd, you effectively "lost control" of that money on Dec 31st. Doesn't matter if it two more months before the recipient actually cashes the check.

CharlesS

Don't you mean "If the date on that check is Dec 31st and you mail it on Jan 2nd, you effectively "lost control" of that money on *Jan 2nd.*"?? After all, if you write Dec 31st on the check and mail it on Jan 2nd, you lose control on Jan 2nd, not on Dec 31st: "the day you drop that check in the mailbox you have effectively lost control of that money". I assume you mistakenly wrote "Dec 31st" instead of "Jan 2nd" in the next-to-last sentence.

Vanessa A

Yes, you lose control of the money on the date it goes in the mailbox or the date you tell the bank to make the payment.

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Pipefitter1994

Hello, in your response the fist half makes sense but then its contradicted. Im still confused, is it the date written on the physical check or when you put in in outgoing mail in mailbox?

Vanessa A

It is the date you actually put it in the mailbox.

When calculating expenses, you will include the items you "put in the mailbox" before midnight on December 31, 2023 as expenses paid in 2023. If you wrote the check on December 27th, but did not mail it until January 1st, 2024, you would need to wait until you file your 2024 return to deduct the expense.

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Needtoknow

The check I am concerned with involves online banking. From what you have said, I assume that the date that the bank mails the check, which I told them to write a week earlier, is the date for the deduction. In your example, if I told them on December 27, 2023, to pay a charity, and they said they would write the check a week later, I could not take that deduction till 2024, since my saying to pay it is not the "mailbox." Am I thinking correctly?