Federal Tax

Simplified Accounting Rules Available for Small Businesses

New simplified accounting rules may be available for small businesses. The IRS has issued proposed regulations that will adopt the simplified tax accounting rules that are part of the Tax Cuts and Jobs Act (TCJA). For tax years beginning in 2019 and 2020, these rules apply for taxpayers with annual inflation-adjusted gross receipts under $26 million (prior to the TCJA, this was $5 million for all prior taxable years). Other changes brought by the TCJA include allowing the use of the cash method of accounting if conditions are met; possible exemption from uniform capitalization rules; and some changes to accounting for inventory. Contact us if you have questions about your situation. © 2020