What Dates Does the Tax Year Cover?

what are the dates of the tax year

Calendar Year

A calendar year tax period runs between Jan. 1 and Dec. 31 each year, the same dates as a regular calendar. Individuals use the calendar-year period. Many businesses also use the calendar-year period because it is familiar, and therefore simpler to account for. Businesses also may elect to use other tax-year periods, but must use the calendar year when it does not keep books or records, does not use an annual reporting method, or is not permitted by the IRS to use a reporting method other than the calendar year.

Fiscal Year

A fiscal year reporting period covers any annual period that ends on any day of the year other than Dec 31. For example, an accounting period that begins on Feb. 1 and ends on Jan. 30 the following year is a fiscal-year reporting period. By default, companies use the calendar-year method. However, an election may be made on the first

return filed by the business to adopt a fiscal-year period. The business notes the fiscal dates used on the first return and must use the same dates each year following. If the business wishes to elect a different fiscal year, or to adopt a calendar year, it must file a request with the IRS on Form 1128 to change its accounting period.

52-53 Tax Year

A 52-53 tax year covers a period that always ends on the same day of the week each year, which may not necessarily be on the same date each year. This means the physical dates covered during the tax year may vary. For example, a business may elect a 52-53 tax year that ends on the last Friday of September. This reporting period is not often chosen by businesses because date variances can cause record-keeping and record-researching issues, especially if accounting duties are handled by different employees or service providers.

Source: people.opposingviews.com

Category: Taxes

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