S-Corp SEP IRA Contribution; Cash vs. Accrual

[Kathy Hall CPA]

I'm wondering if I have been handling something incorrectly. A cash basis S-Corp makes a SEP IRA contribution each year for the single shareholder-employee. Because the contribution does not have to be made until the due date of the return, in the past I have made an adjusting entry to accrue the contribution into the period covered by the tax return. Now I'm thinking that because it is a cash basis taxpayer, maybe I shouldn't be doing that. Any thoughts?

[Maribeth]

The retirement contribution is an allowed accrual for a cash-basis taxpayer. You have been doing it right.

[Kathy Hall CPA]

Thanks Maribeth!