Time Machine

[tjika]

I've been a lurker here but had to share this.
I work in a call center for a medical factoring company.

Last week I had the following question.

client: I just received this invoice for a treatment I had last year. The date of the invoice is in 2013. Could you please change the date so I can pay it in 2012?

He wanted to pay in 2012 so it would qualify for a tax deductible. (I had this situation a lot in december so looked up the rules for my country. The actual payment needs to be done in the year you are claiming the deductible.)

After explaining several times that it was impossible for him to pay in 2012 as it was 2013 and that the IRS looked at when the payment was done, he ended the call saying he wasn't getting anywhere with me.

[wolfie]

I work in a call center for a medical factoring company.

Last week I had the following question.

client: I just received this invoice for a treatment I had last year. The date of the invoice is in 2013. Could you please change the date so I can pay it in 2012?

He wanted to pay in 2012 so it would qualify for a tax deductible. (I had this situation a lot in december so looked up the rules for my country. The actual payment needs to be done in the year you are claiming the deductible.)

After explaining several times that it was impossible for him to pay in 2012 as it was 2013 and that the IRS looked at when the payment was done, he ended the call saying he wasn't getting anywhere with me.

Sounds like the client didn't realize that while *THE* Doctor can do it, *A* doctor can't.

[Primer]

(I had this situation a lot in december so looked up the rules for my country. The actual payment needs to be done in the year you are claiming the deductible.)

Hmmm...now I'm wondering in what country you reside, as this goes against GAAP (Generally Accepted Accounting Principles) as I learned it. And I may be in deep doo-doo as I've always used accrual style. I deduct it in the year in which it was incurred, not when I make the payments. Perhaps if I stay consistent, I'll be ok...(?)

[csquared]

In the US, taxes are reported on a cash basis, not accrual.

A common cheat is to put last years date on the check. The IRS considers the payment made on the day you drop the check in the mail, not when it clears the bank. There is no paper trail to prove when you mailed it. The only proof is the date on the check. The story falls apart when the invoice is dated after they claim to have made the payment. It could be argued that they paid before they received the invoice and the payment had not been posted when the invoice was cut.


We need to get TGK or AmethystSquirrel to confirm this.

[Luna Baby]

As some have mentioned, it can/should be applied to the 2012 'deductible', but if it is not paid until 2013, it would not become a 'deduction' until you file your 2013 tax return (in 2014).

Someone else also mentioned the expense occurring in 2012 but not being billed until 2013....that is a frequent occurrence, especially if it's a procedure that didn't occur until late December. IIRC, they have to file with the insurance within a set amount of time to be considered 'filed timely' but that doesn't mean it is filed the day the procedure occurred.

HTH

[MoonCat]

Where I work we'd be seriously questioning the bill - if the treatment occurred in 2012 it should have been billed in 2012.

You'd think so, wouldn't you? Yet I recently received a letter from my health insurance company asking me to confirm if my surgery in JUNE 2011 was the result of an auto accident or an illness...because they were preparing to pay the claim, 19 MONTHS after the surgery took place.