fiscal year

A fiscal year is any 12-month interval used by a corporation as its accounting period. For most small corporations, and especially for S corporations, the end of the fiscal year is December 31. If you are not an S corporation, you can select whatever date you want for a fiscal year-end. Taxes are computed based on income earned during that fiscal year. For example, a fiscal year ending September 30 would begin on October 1 of the previous year. If you intend to form an S corporation, the end of the fiscal year should be the same as that for the majority of the shareholders, which is usually December 31.
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