Tax reform changes accounting method rules for businesses

 

Notice: Historical Content


This is an archival or historical document and may not reflect current law, policies or procedures.

December 13, 2018

Tax reform changes the cash method of accounting for some businesses.

Here’s how the rules changed. The law:

  • Allows 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.
     
  • Exempts small business taxpayers from certain accounting rules for inventories, cost capitalization and long-term contracts.
     
  • Allows more small business taxpayers to use this cash method after December 31, 2017.