Murray Inc., a calendar year, accrual basis corporation, accrued $946,000 accrued salary and wage expense at the end of 2013. Murray paid the entire amount of the accrued liability on January 13, 2014. Murray can deduct the entire $946,000 accrued expense in 2013.

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According to the IRS, an expense can be deducted in the year it is accrued, even if it is paid in the following year. Therefore, Murray can deduct the entire $946,000 accrued salary and wage expense in 2013, even though it was paid in 2014.