Washington -- Sen. Olympia J. Snowe, R-Maine, chair of the Senate Committee on Small Business and Entrepreneurship, has introduced the "Small Business Cash Accounting Act of 2004" -- a measure designed to expand the threshold of compliance burdens for small businesses.
The bill, S.2675, would permit businesses that earn less than $10 million during the tax year to use cash accounting methods to report their income, thereby slashing record-keeping expenses needed to use the costlier accrual accounting method.
Under the current law, only those taxpayers that earn less than $5 million per year are typically allowed by the IRS to use the cash method.
Snowe said her proposal would not affect the amount of taxes that a small business would pay. According to reports, Snowe's cash accounting bill is the first in a series of bills she intends to introduce to help simplify the tax code for small business owners.
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