The IRS recently finalized updates to various tax accounting regulations to adopt the simplified tax accounting rules for small businesses enacted by the Tax Cuts and Jobs Act (TCJA).
Taxpayers classified as tax shelters cannot use the simplified rules even if they meet the gross receipts test. The final regulations, however, have a special election for certain entities classified as tax shelters.
The regulations also address the annual gross receipts test and other provisions. For tax years beginning in 2020 and 2021, these simplified accounting rules apply for taxpayers with inflation-adjusted average annual gross receipts of $26 million or less. Learn more.