Tax-adjacent bookkeeping glossary terms for bookkeepers: cash vs accrual, depreciation, 1099 thresholds, accountable plans, and year-end cleanup.
Tax-adjacent bookkeeping terms are where "close enough" becomes expensive. A client can run clean monthly reports and still create tax-season cleanup if accruals, depreciation, contractor payments, reimbursements, and prepaid expenses are not handled consistently.
Start with cash vs accrual accounting. The method affects when revenue and expenses show up, how year-end accruals work, and which reports the owner should trust. Then connect the method to practical categories: fixed assets and depreciation, 1099 contractor payments, accountable plan reimbursements, prepaid expenses, and sales tax liabilities.
This sub-hub is for bookkeepers who need tax-aware categorization without pretending to be the tax preparer. Growthy can remember routine patterns and flag uncertain transactions, but a human still reviews the tax-sensitive calls before the books go to a CPA or year-end workpaper.
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Cash accounting recognizes revenue and expenses when money moves. Accrual recognizes them when earned or incurred. Most small businesses run cash for tax and accrual for books. Here's why and how.