What Is a Tax Year?

A tax year is either a calendar or fiscal year (FY) that is covered by a tax return.

Most filers submit a tax return to the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) in Apꦏril that covers the previous tax year (Jan. 1 to Dec.💖 31).

For example, the deadline to submit tax returns that cover the 2024 calendar tax year is April 15, 2025.

Calendar Tax Year

A tax year is an annual accounting perio🌟d for paying or withholding taxes, keepi🍨ng records, and reporting income and expenses.

Wage-earning people pay taxes throughout the calendar tax year. Early in the following year, usually before April 15, they report the wages they 🎉paid to the Internal Revenue Service (IRS) and either pay an🍸y shortfall in their taxes due or request a refund of taxes overpaid.

Self-employed people and small business owners usually file quarterly to report their incomes and pay an estimate of the taxes they owe for that quarter. They also file annual documents to square the accounts and either pay the difference or request a refund.

Fiscal Tax Year

Businesses can use either the calendar year (Jan. 1 to Dec. 31) or the 澳洲幸运5官方开奖结果体彩网:fiscal year (FY) for their tax year reporting. However, once a tax year is adopted, the business mus🌺t continue using it unless it receives permission from the IRS to change. If it changes to a tax year that differs from a calendar year, it is adopting a fiscal year.

A fiscal year is any period of 12 consecutive months that ends on any day of any month except for the last day of December.

State Tax Years

Every state handles taxation independently of the federal system, but most impose income taxes and use April 15 as their required filing date. Virginia is an exception, with a filing deadline of May 1.

Several states do not have income taxes. New Hampshire, which has no income or sales tax, compensates with relatively high property taxes. The New Hampshire property tax year runs from April 1 to March 31 for all property owners.

Short Tax Years

A short tax year is a fiscal or calendar tax year that is less than 12 months long. Short tax years occur either when a business is started or when its accounting period changes.

A short tax year can also occur when a business decides to change its taxable year, which requires the IRS's approval after the entity files . In this case, the short tax period begins on the first day after the close of the old tax year and ends on the day before the first day of the new tax year.

For instance, imagine a business that reports income from June 1 to May 31 every year dec�🐓�ides to change its fiscal year to begin in October. As a result, that business must report a short tax year from June 1 to Sept. 30.

History of the Tax Year

In early American history, taxes were a topic of heated debate because colonists were required to pay taxes to a government they no longer wished to answer to. After breaking free of colonial rule and declaring independence, the U.S. spent several decades passing and repealing tax legislation until the early 1900s. The 澳洲幸运5官方开奖结果体彩网:16th Amendment was finally passed in 1913, granting taxation authority to the federal government.

When the 16th Amendment was passed, only a small number of very wealthy individuals were expected to pay federal tax. Eventually it became necessary to collect more taxes to match the federal programs being implemented.

Congress initially designated March 1 as tax filing day. This date was moved to March 15, 1918, and then April 15, 1954. When the deadline was changed the last time, the IRS claimed that it helped to spread out the workload due to so many returns arriving at once.

The Bottom Line

Tax years allow governments to coordinate the reporting and collecting of taxes, which in modern times is a monumental task. In the U.S. in 2024, the IRS collected $2.43 trillion in individual taxes, $1.71 trillion in payroll taxes, and $530 billion in 澳洲幸运5官方开奖结果体彩网:corporate income taxes.