Tax Accounting Methods
You can achieve substantial tax savings by reviewing your overall accounting methods (e.g., cash, accrual or hybrid) or adopting specific methods that benefit your tax position.
Tax accounting is totally different from GAAP or IFRS. Tax law is primarily concerned with character and timing of revenue or deductions. The constantly changing legal authorities, congressional action and IRS pronouncements can result in a company using unfavorable methods. Our professional staff performs an accounting method study to alert you to possible methods which accelerate your cash flow. The IRS has significantly increased the number of automatic accounting method changes over the last few years. We are able to assist your company in accounting method reviews during sales, acquisitions or restructuring. This will allow you to adopt more effective accounting methods. Our typical accounting method changes prepared are:
• Overall accrual to cash method of accounting
• Deduct certain prepaids
• Deduct loan origination costs
• Deduct previously capitalizable items
• Defer income on advanced payments for services
• Accelerate property tax expense
• Deduct internally developed software costs
• Deduct incurred but not reported reserves
• Identify expenses that are not subject to the 50 percent disallowance for meals and entertainment
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