First time filer
I’ve never filed an income tax return as my own business before. Once I adopt a tax year, I fill in a return using that year. Apparently it isn’t good enough simply to fill out an application for an extension of time to file an income tax return, apply for an EIN or pay an estimated amount.
What constitutes a tax year?
You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. A tax year is usually 12 consecutive months. There are 2 kinds of tax years:
Calendar tax year (this is the one me and most people use)
(begins January 1 and ends December 31). If you start your business using the calendar year model, you’ve got finish the year using this model even if you switch from Sole Proprietor to a partnership or a shareholder in and S corporation. To override this decision, you need direct IRS approval. Additionally, you must follow the calendar tax year model if you:
keep no books have no annual accounting period your present tax year doesn’t qualify as a fiscal year There is a publication called 538 that I got this information from. It discusses these facts in detail.
Download it here.
Fiscal tax year
12 consecutive months ending on the last day of any month except December.