Tax Years | Internal Revenue Service

You must figure your taxable income on the basis of a tax class. A “ tax year ” is an annual accounting period for keeping records and reporting income and expenses. An annual account period does not include a short tax year. The tax years you can use are :

  • Calendar year – 12 consecutive months beginning January 1 and ending December 31.
  • Fiscal year – 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.

Unless you have a required tax year, you adopt a tax year by filing your first income tax return using that tax class. A want tax year is a tax year required under the Internal Revenue Code and the Income Tax Regulations. You have not adopted a tax year if you merely did any of the postdate .

  • Filed an application for an extension of time to file an income tax return.
  • Filed an application for an employer identification number.
  • Paid estimated taxes for that tax year.

If you file your first tax come back using the calendar tax year and you subsequently begin commercial enterprise as a exclusive owner, become a spouse in a partnership, or become a stockholder in an S pot, you must continue to use the calendar year unless you get IRS approval to change it or meet one of the exceptions listed in the instructions to Form 1128, Application To Adopt, Change, or Retain a Tax Year PDF ( PDF ) .
generally, anyone can adopt the calendar class. however, if any of the keep up apply, you must adopt the calendar year.

  • You keep no books or records;
  • You have no annual accounting period;
  • Your present tax year does not qualify as a fiscal year;or
  • You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations.

Short Tax Year

A abruptly tax year is a tax year of less than 12 months. A short period tax return may be required when you ( as a taxable entity ) :

  • Are not in existence for an entire tax year, or
  • Change your accounting period.

tax on a curtly period tax tax return is figured differently for each site.

Not in Existence Entire Year

even if you ( a taxable entity ) were not in being for the entire year, a tax return is required for the time you were in universe. Requirements for filing the return and figuring the tax are generally the like as the requirements for a return for a full moon tax year ( 12 months ) ending on the last day of the shortstop tax year .
For more information, see Publication 538, Accounting Periods and Methods PDF ( PDF ) .

Changing your tax year

once you have adopted your tax year, you may have to get IRS approval to change it. To get approval, you must file Form 1128 PDF ( PDF ). See the instructions for form 1128 for exceptions. If you qualify for an automatic blessing request, a exploiter fee is not required. If you do not qualify for automatic approval, a rule must be requested and a exploiter fee is required. See the instructions for form 1128 for information about user fees if you are requesting a opinion .

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