| “so I did not pay my 2010 taxes until Jan. 2011. Do I need to wait until 2011 to claim the taxes paid on my 1040 or do I include them on my 2010 1040 since that is the calendar year they covered?”---> Under the cash method, you report income in the tax year you receive it and deduct expenses in the tax year you pay them in this case, in 2011; Under the accrual method, you generally report income in the tax year you earn it, regardless of when payment is received, and deduct expenses in the tax year you incur them, regardless of when payment is made, in this case, in 2010.
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