Tax Services:

Tax Accounting Methods and Elections

Using an improper accounting method for tax purposes can result in the imposition of penalties by the Internal Revenue Service.  At the other extreme, using the right accounting method can result in a substantial tax deferral.

At Sisterson, we are thoroughly experienced with the subtle nuances of accounting methods and when a change is appropriate. Many CPA firms fail to consider all of the planning options available to their clients because they do not possess the breadth and depth of experience in these matters as the tax professionals at Sisterson.

We understand that clients want to adopt the accounting methods for inventory that will minimize taxes. In some cases, this means that a change to the LIFO method should be initiated. In other cases, clients want to adopt a method of inventory costing that helps them to make better business decisions, and they want to understand all of their options under Generally Accepted Accounting Principles and the Treasury Regulations. We have extensive experience in inventory accounting and costing systems for all types of businesses, and we have the ability to bring that experience to bear on your inventory costing problems.

As to accounting methods and elections outside the inventory area, we have advised clients on many issues, including the following:

• Adopting the accrual method for vested vacation pay
• Electing to file a consolidated federal income tax return
• Electing the recurring item method for certain accrued expenses
• Accrual of payroll taxes