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Businesses must figure their taxable income and file a return for a tax year or annual accounting period. You’ll need to select an accounting method, which is a set of rules that determines when and how you report your business income and expenses. When you use the cash method of accounting, you count income or expenses at the time you actually receive a payment or pay a bill. The cash method is used by most sole proprietors and other self-employed individuals with no inventory. Under the accrual method, you record income when you earn it and expenses when you incur them. The point where you enter a transaction on your books and when you actually pay or receive cash may be two separate events.
For more information on small business taxes, contact a Nevada Corporate Headquarters representative at 1-800-508-1729.
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