Accounting Method Rules Bring Ease for Small Businesses

IRS rules on changes to an accounting method where businesses log revenue and expenses when cash is received and paid will make it easier for small companies, tax professionals said.

The 2017 tax law raised the annual threshold below which businesses may use the cash accounting method under tax code Section 448 to $25 million in annual average gross receipts, from $10 million. The IRS has just issued proposed rules simplifying tax provisions for businesses that don’t exceed that threshold.

Without the rules (REG-132766-18; RIN 1545-BP53), small businesses would be subject to arduous procedures they ...