Legal Corner


-List Your Site Here! -- Targeted Advertising For Just Pennies A Day! -Tell A Friend - Bookmark This Page

LegalCornerTM - Accounting & Payroll F.A.Q.'s

Find A Lawyer
Law Area:
 

State:
 

 
Search

Search:

Search By:

--Back

Q.What's the difference between a calendar and a fiscal year?

A.Every business is required to maintain its accounting and tax records based on what the IRS calls a "taxable year." A taxable year can be either a calendar year, or a fiscal year. A calendar, which is typically used by most small businesses and by S-corporations, begins on January 1 and ends on December 31. A fiscal year, by contrast, is any 12 month accounting period ending on the last day of any month other than December.

Most small businesses use a calendar year simply because its easier. Fortunately or not, the IRS prefers it when a company selects a calendar year.

In fact, absent a valid business reason sole-proprietors, partnerships, s-corporations, and limited liability companies that select partnership taxation must use the calendar year. Regular C-corporations, however, can opt for a fiscal year.




Copyright 1999-2018 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.