US Small-Business & Multi-Entity Accounting Guide: US GAAP, State Sales Tax Nexus & Form 1099-NEC

By LedgerMapz Tax & Accounting Engineering Team • Reviewed against official CBIC / FTA / IRS rules • Back to Knowledge Hub

Table of Contents: 1. US GAAP Chart of Accounts & Accrual vs Cash Basis • 2. State Sales Tax & Post-Wayfair Economic Nexus Thresholds • 3. Form W-9 Collection & Form 1099-NEC ($600+ Threshold) Compliance • 4. FIFO vs Weighted Average Inventory under ASC 330 • 5. Multi-Entity Cross-Border Consolidation (US + India / UAE).

1. Accrual vs Cash Basis under US GAAP

Under US Generally Accepted Accounting Principles (ASC 606 for revenue recognition), accrual accounting records revenue when performance obligations are satisfied and expenses when incurred, whereas cash-basis tax reporting recognizes inflows and outflows upon bank clearing. LedgerMapz US Edition maintains a strict double-entry general ledger that lets you generate both Accrual and Cash basis Profit & Loss and Balance Sheet statements.

2. State Sales Tax & Economic Nexus

Since South Dakota v. Wayfair, Inc., US states enforce economic nexus thresholds (commonly $100,000 in gross sales or 200 transactions per calendar year in a state) alongside physical nexus. LedgerMapz tracks taxable vs exempt sales by state, county, and city and separates collected Sales Tax into current liability ledgers.

3. Form W-9 & Form 1099-NEC ($600+ Contractor Reporting)

Any US business paying $600 or more in non-employee compensation during the calendar year to an unincorporated independent contractor (or legal services provider) must collect Form W-9 (EIN/SSN) and file Form 1099-NEC by January 31. Use the LedgerMapz US Tax Portal to track 1099-eligible vendor ledgers automatically.