I do consulting. I generally work on a w-2. I worked on a 1099 about 8 years ago and used cash basis for my tax return. I am now working on 1099 again. It is beneficial to file my taxes on accrual basis. Do I have to file a form 3115 to change basis? Is the fact that I haven't filed a Sched C for so long matter? The business is the same type, but not really the same business (different client, etc.)
If it's been eight years since your previous final Schedule C, and there are no carryovers from that time, I'd go ahead and use accrual accounting on the new Sched C (also check the "first year" box).
This only applies to your Schedule C business, the rest of your tax return is still cash basis.
The method used must "clearly reflect income"; also take care with any expense payments to related parties. See instructions for Form 1040 Schedule C Line F for more details.
A choice of accounting method for a new business activity does not. Simply check the correct box on Schedule C. It can be different than the remainder of the return.
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