I'm nearly complete and preparing to launch my business. However, I've noticed that taxes aren't as simple as everyone makes them out to be. I'm mostly confused about cash vs accrual accounting for my situation.
I'm planning on calling the IRS tomorrow for more clarification, but I'd like some opinions from other people. Anyway, to my question -
I'm going to make my business a sole proprietorship. My business sells a single piece of software available only via download. The IRS however says that most businesses that sell things have an inventory. I don't understand how this would apply to me. I do not stock anything, the downloads are available free and the user is simply purchasing a license key from me. There's no stock of these either - they're generated on demand. Do you guys thing that I would be okay with cash based accounting?