Does the IRS allow individuals (not a business) to account for their income on an accrual basis rather than a cash basis for the purpose of paying personal Federal income taxes?

Note: This question is just a matter of curiosity and I'm not actually considering doing this.

  • See also this question in which a comment claims that in India, only non-profit organizations are permitted to use cash basis; everyone else must use accrual basis. If true, weird.... Commented Dec 24, 2012 at 3:39

1 Answer 1


Yes. But once you chose the method (on your first tax return), you cannot change it without the IRS approval. Similarly the fiscal year.

For individuals, I can't think of any reason why would accrual basis be better than cash, or why would an individual use a fiscal year other than the calendar year.

  • 3
    Do you happen to have a source my understanding was that individuals couldn't use the accrual method?
    – stoj
    Commented Jan 3, 2013 at 17:53
  • @stoj couldn't? why couldn't? Its just too complicated and IMHO unjustified unless you have too high volume of transactions to track.
    – littleadv
    Commented Jan 3, 2013 at 18:00

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