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Attention, attention! Listen up, folks! Let me drop some knowledge bombs about gift cards/certificates.
Here's the deal: until those bad boys are actually redeemed, they don't count as revenue. So, my friends, don't go including them in your profit/loss statement when you've made the sale. Why, you ask? Well, if you include them, you'll end up paying more sales tax to the government every quarter. Not cool, right? But wait, there's more! Your year-end revenues will also look through the roof, and that means you'll be forking over more moolah in income tax. Yikes!
Bookkeepers who aren't familiar with the ins and outs of gift certificates might miss this little detail. It happens all the time. So, take my advice and don't let those sneaky little certificates mess with your taxes. You'll thank me come tax season.
- Speakeasy Bookkeeping