topic Do I need to file form 3115? in Get your taxes done using TurboTax

Do I need to file form 3115?

n1njah — Mon, 20 Feb 2023 23:46:52 GMT

S-corporation had cash-basis books and was cash-basis taxpayer, didn't start to use invoices until the next year with accrued income. Once you have accounts receivable, the books are considered accrual. So would I have to file form 3115 to request a change of my overall method of accounting from cash to accrual? Would I have to change the checkbox from cash to accrual on 1120S Form, Schedule B Question 1. Or can I still be considered cash.

Thanks~

Re: Do I need to file form 3115?

ThomasM125 — Tue, 21 Feb 2023 00:09:38 GMT

Normally, you don't need to file a business return on the accrual basis unless your average sales are over $25 million dollars. It doesn't matter if you have receivables or payables, you can still file on the cash basis. Your sales would be the amount of deposits from sales and expenses would be the payments you made during the year. You just need to factor out your receivables and payables when you report your receipts and expenses.

Re: Do I need to file form 3115?

Anonymous_ — Tue, 21 Feb 2023 00:30:27 GMT

It also appears as if you would no longer have to file a 3115 for the change if you are a small business.

See https://www.thetaxadviser.com/issues/2022/may/new-accounting-method-change-procedures-small-business-taxpayers.html

Re: Do I need to file form 3115?

n1njah — Tue, 21 Feb 2023 22:57:18 GMT

Thank you