Do I report self employment income, professional fees as amount invoiced in the tax year, or amount paid to/received by me in the tax year

This is my first year working as an independent contractor for my previous employer doing on call work periodically. I invoiced twice in 2023 but only received payment for one invoice in 2023. Not sure if I enter the total amount invoiced in 2023 or what I received in 2023?

3308

Moderator

Mar 20, 2024 2:03:16 PM

You would report income in the tax year you earn it, no matter when you receive it.

Level 5

Mar 20, 2024 2:08:12 PM

That depends on the type of your self-employment income. As per the Canada Revenue Agency (CRA), farmers, fishers and self-employed commission agents can use either the cash method or the accrual method to report income. All other self-employment income must be reported using the accrual method.

When using the cash method, you must report income in the fiscal period you receive it, and deduct expenses in the fiscal year you pay them. When using the accrual method, you must report income in the fiscal period you earn it whether received or not, and deduct expenses in the fiscal period you incur them whether paid or not.

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Do I report self employment income, professional fees as amount invoiced in the tax year, or amount paid to/received by me in the tax year