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 automatic consent changes include:
- a switch to the cash method of accounting;
- an end to UNICAP for certain costs, including self-constructed assets;
- certain changes to inventory items;
- a change from the percentage-of-completion method for long-term construction contracts; and
- an end to UNICAP for home construction contracts.
If you have any questions or if you would like more information, contact Fred Schutz at (856) 722-5300 ext. 201 or Dave Gill at ext. 210.