Start new business with cash method or switch old business from accrual to cash?

[pstanton485]

I booked freelance writing income in 2017 on Schedule C (under $100) -- just one article for a magazine. I checked "accrual basis" on the return.

This business changed / evolved in 2018. Now it's more content / marketing writing, though still writing. I want to use cash basis accounting, but form 3115 seems like overkill that would increase examination risk.  

Would it be acceptable to file my writing services as a new business with cash method accounting? It would be a net positive change.

Thanks for any help. 

[LudwigVan_fan]

It appears to me you checked the wrong box for 2017.  A one time item does not establish a method of accounting.

In 2017, did you just have $100 of income and claim no expenses?  Did you actually "accrue" any income or expenses in 2017 and not pay until 2018?   If you had NO accrued income or expenses at the beginning and end of 2017, and income/expenses in 2017 were minimal (such as what you stated, only $100 worth); AND there was no activity prior to 2017, you haven't really established a method of accounting.

No, I wouldn't do a F3115.  (assuming there was no Sch C prior to 2017, or if so, again, all done on the cash basis and minimal activity).

Based on the assumptions above, just check the cash basis for 2018, and be consistent with your income/expenses.

Also, even with F3115, based on what you stated and the assumptions I made, there would be no duplication of expenses, no omissions of income, etc., that would result in Section 481(a) adjustment.

[TimDonsei]

I stumbled upon this thread and thought I'd chime in. While I'm not a tax expert, I understand why you'd want to switch from accrual to cash basis accounting for your writing services business. Filing a new business with cash method accounting may be acceptable. Still, it's always best to consult with a professional to ensure you're doing everything correctly.BTW, if you're considering starting a new business, OGScapital is a great resource for business plan writing and other services. I discovered them during my own research and found their team to be really helpful. Check out their website if you're interested: https://www.ogscapital.com/about-us/