My understanding is Form 3115 is used to Change the Accounting Method, including changes to both impermissible and permissible accounting methods depending on the Code used (see below).
You are correct that I used a permissible depreciation method, but I want to change the method from depreciation to an expense under Safe Harbor.
Can you only elect Safe Harbor in the year the expense was incurred (which would require refiling for those tax years), or can you change the method of accounting using Form 3115?
Why Use Form 3115?
There are two main reasons why you might need to use Form 3115. The first scenario involves correcting a mistake on your previous tax returns. If you discover that an incorrect accounting method was used, Form 3115 allows you to request permission from the IRS to fix the error and ensure your taxes are reported accurately.
The second scenario involves switching to a new accounting method. Perhaps you find a different method that better reflects your business's financial activities or offers a potential tax advantage. Because any change in accounting methods requires approval from the IRS, you can request this change in method through Form 3115.
- Changing from not taking depreciation to taking depreciation. (Because this is a change from an impermissible method to a permissible method use Code 7 on Form 3115)
- Changes in methods or conventions, (Because this is a change from 1 permitted method to another, use Code 8 or 200 if MACRS on Form 3115)
- Changes to or from a required life, (Because this is a change from 1 permitted method to another, use Code 8 on Form 3115)
- Correcting depreciation on leasehold improvements from using the incorrect life of the lease term to the correct life of the asset (generally 39 years). (Use Code 199 on Form 3115)
