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 have no doubt that it was a principle they fought for, as much as our ancestors, and not to avoid a three-penny tax on their tea; and the results of this battle will be as important and memorable to those whom it concerns as those of the battle of Bunker Hill, at least.”
—Henry David Thoreau (1817–1862)
“July 4. Statistics show that we lose more fools on this day than in all the other days of the year put together. This proves, by the number left in stock, that one Fourth of July per year is now inadequate, the country has grown so.”
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)