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Regarding IRS rules for switching from cash to accrual accounting

Andrew Dickey's Profile

In order to more accurately state our finances we would like to have our 2017 financials on an accrual basis. However we have always been a cash basis company. At first we thought we would have to maintain two sets of books for 2017 - the accrual books for looking at our finances and cash books for tax reporting. But it appears from reading the instructions for Form 3115, that we can go back to the beginning of 2017, reenter all our transactions on an accrual basis and then just go forward on an accrual basis. When we file our taxes at the end of the year, we would file them on an accrual basis and include Form 3115 requesting an automatic change from cash to accrual. Did I get this right?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Andrew
Which accounting/ERP system are you using? Depending on that and your system set up, you may have an option to avoid re-entry (if it allows you to choose cash v accrual tracking).
That may make it easier for you to address the tax reporting (and I am not a tax person!!)
Regards
Len

Andrew Dickey
Title: Vice President
Company: BestWeb Corporation
(Vice President, BestWeb Corporation) |

Quickbooks - but my real question relates to when should we file the Form 3115? Should we file it with our taxes at the end of the year? Or should we file it ahead of time?

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