Just in time for small business owners’ 2014 tax returns, a procedure for easier compliance with final tangible property repair regulations was announced by the IRS last week.
The simplified procedure is now available starting with the 2014 income tax return, which taxpayers or their tax professionals are currently preparing. In general, for the first taxable year beginning on or after Jan. 1, 2014, small businesses may change the method of accounting on a prospective basis.
The simplified procedure is available:
- To small businesses, including sole proprietors;
- With assets totaling less than $10 million; or
- With average annual gross receipts totaling $10 million or less.
Small businesses that intend to use this new procedure for 2014 taxes will not have to file a Form 3115, Application for Change in Accounting Method. Previously a requirement, the IRS decided to waive the filing of this form after receiving many requests from small business owners and tax professionals.
However, check with your accountant about certain circumstances that may still require a Form 3115.
The IRS is “pleased to be able to offer this relief to small business owners and their tax preparers in time for them to take advantage of it on their 2014 return,” IRS Commissioner John Koskinen said in making the announcement.
To read more details in Revenue Procedure 2015-20, click here.