Employers computing taxable income under the accrual method may deduct wages accrued as compensation expense in one year and paid in the subsequent year, as long as the company makes the payment within 2½ months after the employer's year-end.

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Employers using the accrual method can deduct wages accrued in one year but paid in the subsequent year as long as payment is made within 2½ months after the employer's year-end.

Employers Computing Taxable Income Under the Accrual Method May Deduct