Tax Year
The fiscal year for individuals and entities to report and pay income taxes is often known as the taxpayer's tax year or taxable year. Taxpayers in many jurisdictions may choose their tax year. In federal countries (e.g., United States, Canada, Switzerland), state/provincial/cantonal tax years must be the same as the federal year. Nearly all jurisdictions require that the tax year be 12 months or 52/53 weeks. However, short years are permitted as the first year or when changing tax years.
Most countries require all individuals to pay income tax based on the calendar year. Significant exceptions include:
- United Kingdom: individuals pay tax on a year ending 5 April.
- United States: individuals may (but rarely do) elect any tax year, subject to IRS approval.
Many jurisdictions require that the tax year conform to the taxpayer's fiscal year for financial reporting. The United States is a notable exception: taxpayers may choose any tax year, but must keep books and records for such year.
Read more about this topic: Accounting Reference Date
Famous quotes containing the words tax and/or year:
“I come into the peace of wild things
who do not tax their lives with forethought
of grief.”
—Wendell Berry (b. 1934)
“An ordinary man will work every day for a year at shoveling dirt to support his body, or a family of bodies; but he is an extraordinary man who will work a whole day in a year for the support of his soul. Even the priests, men of God, so called, for the most part confess that they work for the support of the body.”
—Henry David Thoreau (1817–1862)