IRS issues guidance on small business accounting method changes under Tax Cuts and Jobs Act
The Internal Revenue Service issued guidance on new tax law changes that allow small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period to use the cash method of accounting.
The Revenue Procedure outlines the process that eligible small business taxpayers may use to obtain automatic consent to change accounting methods that are now permitted under the Tax Cuts and Jobs Act, or TCJA.
The TCJA, enacted in December 2017, expands the number of small business taxpayers eligible to use the cash method of accounting and exempts these small businesses from certain accounting rules for inventories, cost capitalization and long-term contracts. As a result, more small business taxpayers will be allowed to change to cash method accounting starting after Dec. 31, 2017.
For further details on this, visit: https://www.irs.gov/newsroom/irs-issues-guidance-on-small-business-accounting-method-changes-under-tax-cuts-and-jobs-act
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