In previous US 1040s that I have filed for my husband I calculated income based on an 'accrual' method. Eg I apportioned interest income from an ISA received over the year it related to. So a payment on 4 April 2015 would be roughly 9/12 included as income in the December 2014 income tax return and 3/12 included as income in the December 2015 income tax return.
I've realised what a nightmare this is, trying to evenly distribute the income across two income tax years and returns, so would like to change to a 'cash' method of accounting for income, for example the interest income received on 4 April 2015 would be fully included as income in the December 2015 US income tax return.
I'd like to understand:
1. is this an acceptable approach; and
2. is it acceptable to change calculation method like this without some sort of notification to the IRS?
NB: my husband has never had a US income tax liability since becoming an expat, up until 2013 he earned under the threshold to file and in 2013, 2014 he has a huge amount of tax credits that mean he doesn't need to pay tax.
Any input is much appreciated.
