Are individuals allowed to use accrual based accounting for federal income tax?

Question

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.

littleadv · Accepted Answer

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.

Are individuals allowed to use accrual based accounting for federal income tax?

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