The main difference between the cash and accrual methods of accounting is timing: Income is generally reported earlier under the accrual method. Two provisions of the Tax Cuts and Jobs Act could affect your choice of accounting method. First, starting in 2018, the gross-receipts threshold for using the cash method has been increased to $25 million. Second, you must now report revenue for tax purposes no later than for financial reporting purposes. These changes could prompt more companies to use the cash method. Contact us to discuss the pros and cons.
