Washington (July 22, 2004) -- U.S. Senator Olympia J. Snowe, R-Maine, chair of the Senate Committee on Small Business and Entrepreneurship, has introduced a bill aimed at simplifying the tax code for small businesses by permitting businesses that generally earn less than $10 million during the tax year to use cash accounting methods to report their income.
Under current law, only those taxpayers that earn less than $5 million per year are allowed by the Internal Revenue Service to use the cash method. Snowe’s bill, the Small Business Cash Accounting Act of 2004, provides a $10 million threshold that would allow small companies to use cash accounting, which should slash the costs associated with using accrual accounting methods.
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