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:
“To tax and to please, no more than to love and to be wise, is not given to men.”
—Edmund Burke (1729–1797)
“The author’s conviction on this day of New Year is that music begins to atrophy when it departs too far from the dance; that poetry begins to atrophy when it gets too far from music; but this must not be taken as implying that all good music is dance music or all poetry lyric. Bach and Mozart are never too far from physical movement.”
—Ezra Pound (1885–1972)