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Recent Posts:Weekly Tax Tip #16Methods of accounting. The IRS requires that the method chosen must clearly reflect income consistently from year to year. There are primarily two methods of accounting used in arriving at taxable income, the cash method and the accrual method. Under the cash method, income is taxable when received and expenses deducted when paid. Under the accrual method, income is taxable when earned and expenses are deducted when incurred. When permitted, most taxpayers opt for the cash method so that income and expense because that method usually delays the reporting of income. The accrual method, with some exceptions, is required for businesses that maintain an inventory of merchandise for sale. Need more information? We can help. Give me a call at 931-648-4786. Thomas M. Henry | 02/20/2012
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