What you need to do before the Tax Year End 2022
When does the tax year end?
The way a business files its taxes will determine when the tax year ends. Some companies file their taxes using the calendar year, which is a 12-month period starting on January 1 and ending on December 31. Others use a fiscal year, which can be any 12-month period that ends on any day other than December (the end of a calendar year), and can be any 12-month period. Some businesses even employ a 52-53 week tax year, which not only accounts for the correct number of weeks in a year but also allows the year to end on a date other than the last day of the month.
Different business and organizational types use various starting and finishing months for their fiscal year. These can vary from one business to the next and are occasionally constant within an industry. It’s critical to stay up to date on the most recent fiscal and tax regulations and policies that are relevant to your situation. Make sure to speak with an accounting professional in your company or seek outside tax advice if you have questions about your own tax year. When making tax-related business decisions, be sure to fully comprehend your tax year.
What is the tax year?
The tax year is the accounting period used by the government and businesses to determine their respective tax obligations and payments. Typically, a business tax preparation paperwork should account for everything that occurred during that specified tax year. Depending on their circumstances, businesses can frequently choose between using a calendar tax year or a fiscal tax year. Generally, people are required to file income taxes based on the calendar year. Whichever time frame a business or individual chooses, these are the twelve months during which they typically only record tax withholdings and payments, income, and expenses.
The tax year may at times be the most crucial period for a business owner or individual. Other times, submitting more frequent tax returns, such as quarterly, may be helpful or even necessary. This might be accurate for proprietors of small businesses or independent contractors. For businesses that have been operating for fewer than 12 months, a tax year may occasionally be shorter than the standard 12-month period. If you have concerns about your personal tax situation, the best tax year to file, or when and how to file your tax returns, you should think about speaking with a qualified tax professional.
Calendar year vs. fiscal year
Understanding the distinctions between various account periods, specifically the fiscal year and the calendar year, can be necessary due to the varying nature of the tax year. For accounting and tax purposes, some businesses have the option of using the calendar year or a different fiscal year. Others, typically those who don’t maintain financial records, are required to use the calendar year for tax reporting purposes.
Here are the features of the calendar year:
These are features of a fiscal year:
When do you need to do your taxes?
Your own tax deadline will depend on your specific situation. When your taxes are due can vary depending on a number of factors, including your business’s size and the tax year you chose (calendar, fiscal, or 52-53 week). You might only need to file taxes once a year and make more frequent payments. To make sure they pay enough tax throughout the year, some businesses, for instance, submit their tax payments every three months.
The following information outlines when you might file your taxes in various circumstances:
Individuals and calendar-year businesses
The deadline to file taxes for a calendar year has typically been April 15 for individuals and businesses, but it is subject to change based on outside factors. For instance, the IRS may decide to extend the tax filing deadline for all taxpayers for the entire calendar year due to economic factors. The standard tax deadline is frequently moved to the following business day if it falls on a non-business day, like a Saturday or Sunday. Consultation with a tax expert, such as an accountant or tax attorney, is frequently the best way to determine when your calendar year taxes are due.
Fiscal-year businesses
The tax filing deadline may vary for companies whose fiscal year corresponds to their tax filing period. Typically, this occurs in the fourth month after the end of a company’s fiscal year, though this may vary based on the rules and regulations in effect at the time. Additionally, companies that have always used a fiscal year for tax purposes are free to do so indefinitely.
Remember that switching from a calendar year to a fiscal year tax filing schedule typically requires special IRS permission for businesses that initially pay taxes on a calendar year basis. Consult with a tax expert, such as an accountant or tax lawyer, to determine when your fiscal year taxes are due.
FAQ
What is the tax year period for 2020?
Forms, Schedules, and Publications for the 2020 tax year, which runs from January 1 to December 31, provided by the IRS The deadline for electronically filing 2020 tax returns was October 15, 2021. After that date, only paper forms can be used to mail in 2020 returns. Use the 2020 Tax Calculator to estimate your 2020 Return.
When can I start filing taxes for 2021?
January 24: IRS begins 2022 tax season. Individual 2021 tax returns begin being accepted and processing begins. Earned Income Tax Credit Awareness Day is on January 28 to raise awareness of the worthwhile tax credits that are readily available to many people, including the option to use income from a previous year to qualify.
What year is tax year 2021?
January 1, 2021 The US tax year typically coincides with the calendar year.
When did 2019 tax year end?
The deadline for submitting a 2019 individual federal income tax return is April 15, 2020 (see the post above). You will automatically receive a delay until June 15, 2020 if you are not a US citizen on April 15, 2020. Though interest will start to accrue from April 15 if you owe any taxes for the year.
