Tabco Inc., a calendar year, accrual basis corporation, accrued $48,800 wage and salary expense and a corresponding liability at the end of 2015. How much of the accrued expense is deductible in 2015?

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Quizplus · Accepted Answer

According to the IRS rules, a corporation can deduct accrued wages and salaries in the year of payment if it pays the expense by the 15th day of the third month following the end of its tax year. Therefore, Tabco Inc. can deduct the portion of the accrued wage and salary expense paid by March 15, 2016, in its 2015 tax return.

Tabco Inc, a Calendar Year, Accrual Basis Corporation, Accrued $48,800 Wage