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Level 2
posted Mar 6, 2020 7:12:53 AM

Tax Method Correction Form 1065 LLC

My first year filing Form 1065 with TurboTax I selected the  Accrual method for my accounting designation.  This was a mistake.  I met to select the Cash method.  I am now filing my second year and noticed the error. Can I make the change this year in TurboTax without issue? AND since my method didn't actively change, meaning it was just an error with the selection, do I have to file a Form 3115 with the IRS?

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1 Best answer
Expert Alumni
Mar 6, 2020 11:21:25 AM

Yes - You can change the accounting method on your partnership return:

  1. While in the return, click the Business Info tab. 
  2. Scroll down the list and click Edit next to Accounting method.
  3. Change it to Cash.

 

Yes - You do have to file Form 3115 - Application for/Change in Accounting Method with the IRS because you originally indicated that the LLC was on an accrual basis and you want to switch to cash basis,

 

Form 3115 is available in TurboTax Business. You can access it in Forms Mode:

  1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar. 
  2. Above the Forms in My Return list on the left, click the Open Forms icon.
  3. Type 3115.
  4. Double-click on Form 3115, pp1-3.  
  5. The form will appear on the right and you will be able to complete the form there.
  6. To return to the interview, click on the Step-By-Step icon in the top right of the blue bar.

1 Replies
Expert Alumni
Mar 6, 2020 11:21:25 AM

Yes - You can change the accounting method on your partnership return:

  1. While in the return, click the Business Info tab. 
  2. Scroll down the list and click Edit next to Accounting method.
  3. Change it to Cash.

 

Yes - You do have to file Form 3115 - Application for/Change in Accounting Method with the IRS because you originally indicated that the LLC was on an accrual basis and you want to switch to cash basis,

 

Form 3115 is available in TurboTax Business. You can access it in Forms Mode:

  1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar. 
  2. Above the Forms in My Return list on the left, click the Open Forms icon.
  3. Type 3115.
  4. Double-click on Form 3115, pp1-3.  
  5. The form will appear on the right and you will be able to complete the form there.
  6. To return to the interview, click on the Step-By-Step icon in the top right of the blue bar.