IRS Eases Rules on Small Businesses Changing Accounting Methods

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Feb. 13 — Businesses with total assets of less than $10 million can make accounting method changes under the tangible property rules on a prospective basis for the first taxable year beginning on or after Jan. 1, 2014, the IRS said.

Furthermore, these taxpayers may make the tangible property changes in method of accounting for tax year 2014 without filing a separate Form 3115, Application for Change in Accounting Method, the Internal Revenue Service said in Revenue Procedure 2015-20, issued Feb. 13.

The final tangible property regulations (T.D. 9636) issued in 2013 explain how taxpayers can deduct or capitalize their expenses for maintaining, fixing and replacing tangible property. The final rules also expanded a de minimis safe harbor for expensing certain costs and extended a routine maintenance safe harbor to buildings (179 DTR GG-1, 9/16/13).