Are there any expenses that can be written off my taxes on the cash basis method that I actually don’t have to pay in order to receive the benefit?
Yes, like I mentioned before there are always exceptions to the rule.
The IRS allows all businesses on the cash basis method to write off certain expenses that were not actually paid for in cash by the end of the year.
If you are paying payroll to your employees in your business you might have a payroll at year-end that does not actually get paid before the end of the year but the payroll and the related payroll taxes associated with the payroll are still write-offs on your tax return. This allows a business at year end to actually use the accrual function to record a payroll or bonus, use it on their taxes as a write-off, but not have to pay it until the new year.
In another situation, still using the cash method of accounting, we can record any type of business expense and pay it with a credit card. These business expenses that are paid by credit card are still complete write-offs, in the year purchased, even though the owner might be paying just the minimum payment each month on the credit card and the full amount of all expenses does not get fully paid for months or years to come. This allows us to use our credit cards to maximize business expenses and reduce our federal tax liability. There is a real tax advantage for cash basis tax payers to utilize this feature because you can conserve your cash and use it to help your business to grow.
Contractors or any other type of business can order the materials or supplies they know they will be needing in the coming months and charge it on their credit card before the end of year. Now these expenses can be considered a write-off in the year purchased without even having to pay anything before the year ended.