For tax purposes, we report on cash basis, but can we still deduct a 401K contribution relating to the tax year, but made in the following year?

,
Home » Questions » For tax purposes, we report on cash basis, but can we still deduct a 401K contribution relating to the tax year, but made in the following year?

Yes, if for example, your company year-end is December 31, 2018 and your tax return reflects cash basis numbers –  even if you make a 401K company contribution in 2019, prior to filing of your company’s 2018 tax return, those 2018 contributions would be considered a deduction on your 2018 business tax return.

Have a question for our small business and accounting experts?

Please submit your question to us and we'll notify you when it's added to our resource archive.

Submit a Question