File Form 3115 with Inkle
Form 3115 is how your business formally switches its accounting method with the IRS. That includes moving from cash to accrual, fixing depreciation, adjusting revenue timing, and catching up on deductions you missed. Inkle prepares it, picks the correct change number, and files it with your return.
What is Form 3115?
The Application for Change in Accounting Method (Form 3115) is how a business formally notifies the IRS of a switch in how it accounts for income or expenses. The most common reason is moving from cash to accrual, though it also covers depreciation corrections and revenue recognition changes. Most changes qualify for automatic consent, meaning you file it with your return and the change takes effect right away.
Who can file Form 3115?
Form 3115 is filed by any US business that wants to change how it accounts for income or expenses. This includes C-corps, S-corps, partnerships, LLCs, and sole proprietors. You also need to file it if you are catching up on depreciation you missed in prior years.
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C-corporations
Delaware and other US C-corps changing revenue recognition, switching from cash to accrual, or correcting depreciation.
S-corps and partnerships
Pass-through entities follow their own return deadlines, with the same method-change mechanics.
LLCs and sole proprietors
Single-member LLCs and sole proprietors filing on Form 1040 can change methods the same way.
Catching up on depreciation
Missed depreciation on assets you still own? Claim the full catch-up this year. No prior-year amendments needed.
Cash to accrual switches
Crossing the Section 448 gross receipts threshold? This is the most common reason startups file Form 3115.
R&E under Section 174
Capitalize and amortize specified research costs. Five years for domestic, 15 years for foreign expenditures.
Inkle makes filing Form 3115 simple
Form 1120 is filed by U.S. C Corporations and foreign corporations engaged in a U.S. trade or business. It does not apply to S Corps, LLCs, or nonprofits, which file different tax forms.
We identify the right change, confirm it qualifies for automatic consent, and match it to the correct Designated Change Number.
We compute the true-up, apply the correct spread, and show the working so the number holds up under review.
A dedicated tax expert answers your questions in Inkle chat, with replies on a 12-hour SLA.
The original attaches to your 1120 or 1040 and the signed copy goes to the IRS National Office. Handled for you.
Common method changes
Automatic changes carry a Designated Change Number (DCN). Here are the ones we see most often across US startups.
Switch your overall method from cash to accrual. The most common Form 3115 filing we see from growing startups.
Fix an incorrect depreciation method on assets you still own and take the full catch-up in the current year.
Capitalize specified research or experimental costs and amortize over five years (domestic) or 15 years (foreign).
Deduct repairs or capitalize improvements under the tangible property regulations.
The IRS List of Automatic Changes is the authority for each DCN. Inkle's tax experts confirm your change qualifies for automatic consent and select the exact number before filing.
Deadline
The deadline to file Form 3115 is with your timely federal return, including extensions. For a calendar-year C-corp that is April 15, or October 15 with a Form 7004 extension.
Pro Tip
Filing Form 3115 incorrectly or skipping it when a method change is required can result in the IRS disallowing the change entirely. That can mean back taxes and interest on any underpayment.
FAQs
It is used to request a change in accounting method with the IRS. The most common reason is switching from cash to accrual, but it also covers depreciation changes, revenue timing adjustments, and catching up on missed deductions from prior years.
Any business that wants to change an accounting method, including C-corps, S-corps, partnerships, LLCs, and sole proprietors. Startups crossing the Section 448 gross receipts threshold and moving from cash to accrual are among the most frequent filers.
When you change a method, the IRS requires a one-time adjustment to prevent income from being taxed twice or missed. A negative adjustment is taken in a single year. A positive adjustment is generally spread over four years.
For most changes, no. The majority fall under automatic consent. You file Form 3115 with your return and the change takes effect without prior IRS sign-off.
Yes. If you missed depreciation in prior years on property you still own, Form 3115 lets you claim the full catch-up in the current year rather than amending each prior return.
Yes. It must be filed with your timely return, including extensions. Filing late can cause the IRS to reject the method change.
Automatic changes carry no user fee to the IRS. Non-automatic requests require a fee paid through Pay.gov. Inkle's $200 covers preparing and filing the form.
If your books are with Inkle, we already have what we need and will flag when a method change is required. If you manage your own books, we will send you a checklist covering your asset schedule, prior-year returns, and accounting method history so we can identify the right DCN and compute the Section 481(a) adjustment.
