What a calendar year is
A calendar year is 12 consecutive months starting January 1 and ending December 31. It’s the default tax year for individual taxpayers, and it’s the only option most people ever encounter, since choosing a different tax year is a business decision, not an individual one.
What a fiscal year is, and who uses one
A fiscal year is any 12-consecutive-month period that ends on the last day of a month other than December. A 52/53-week tax year is a related but distinct third option: instead of ending on a fixed calendar date, it always ends on the same day of the week (say, the last Friday of a given month), which keeps every fiscal year almost exactly 52 weeks and makes year-over-year comparisons cleaner for businesses running on a weekly retail or accounting cycle.
| Calendar year | Fiscal year | 52/53-week year | |
|---|---|---|---|
| Start/end | Always January 1 – December 31 | 12 months, ending the last day of any month except December | Ends on the same weekday each year, near a chosen month-end |
| Typical users | Individuals; most sole proprietors, partnerships, S corporations | C corporations with a natural non-calendar business cycle | Retailers and businesses on a weekly operating cycle |
Source: Internal Revenue Service
Why most individuals use the calendar year
Individual taxpayers filing Form 1040 are required to use the calendar year unless they keep formal books and records on a fiscal year basis and separately elect to adopt one, a step almost no individual ever takes, since there’s no practical benefit for personal tax reporting. That’s why a W-2 always covers January through December, regardless of when a particular employer’s own fiscal year happens to end.
How businesses choose or change their tax year
The following types of businesses are required to use the calendar year:
- Sole proprietors
- Single-member LLCs
- Most partnerships
- S corporations
C corporations have more flexibility and can generally choose any 12-month period as their tax year, often picking a fiscal year-end that lines up with a natural lull in their business cycle rather than the arbitrary December 31 cutoff.
Once a tax year is adopted, changing it isn’t automatic. A business generally needs IRS approval, requested on Form 1128, Application to Adopt, Change, or Retain a Tax Year. The adoption, change, or retention of a tax year often creates a short tax year, a transition period of less than 12 months that bridges the old tax year and the new one, requiring its own separate short-period return.
How the tax year affects your filing deadline
Your tax year determines your tax filing deadline, not just your accounting/bookkeeping period.
Individual filers, who are almost all calendar year filers file by the familiar April 15th or October 15th extension deadline.
Partnerships (including multi-member LLCs) and S-Corps who are calendar year filers, file by March 15 or by the September 15 extension deadline.
Any business using a fiscal or 52/53 tax year files their taxes using a date tied to its own year-end, generally the 15th day of a set number of months after that fiscal year closes.
If you ever need documentation of what you reported for a specific tax year, your tax transcript for a given tax year is generally the fastest and cheapest way to get it.
