What Year is a Check Deductible?
People write checks for business expenses and charitable giving all throughout the year. However, when you inevitably mail a check on December 31st, and it's cashed in January of the next year, you may be confused about which year's tax return to report it on. Thankfully, there is case law clarifying this exact question in multiple scenarios:
There's a rule for payments by check as well — tax law treats a payment by check as made when the check is delivered. See Guy v. Commissioner, 105 T.C.M. 1626, 1628 (2013). If a check is dated in one year but cashed in the next year, the deduction will not be allowed absent proof of delivery in the year of the deduction. See Reynolds v. Commissioner, 79 T.C.M. 1376, 1383 (2000), aff'd, 296 F.3d 607 (7th Cir. 2002). There is an important exception for people who wait till the end of the year to make their charitable contributions. Those count in the year that the mailbox slot slams shut. See Treas. Reg. § 1.170A-1(b).
Edwin L. Gage et al. v. Commissioner. T.C. Memo. 2023-47.