What is the difference between fiscal year&calendar year for a business?

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What is the difference between fiscal year&calendar year for a business?

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The two main accounting periods businesses use are the fiscal year and the calendar year. For owners of new businesses, choosing how to define their annual accounting period can have substantial tax implications.Definition of a Calendar YearThe Internal Revenue Service (IRS) defines a calendar year as 12 consecutive months that begin January 1 and end December 31.Definition of a Fiscal YearThe IRS defines a fiscal year as 12 consecutive months that end on the last day of any month except December or one “that varies from 52 to 53 weeks but does not have to end on the last day of a month.”RequirementsAny business can choose the calendar year as its annual accounting period. Most businesses can choose to use a fiscal year instead; however, businesses that cannot choose a fiscal year include those that keep no books or records, have no annual accounting period, or are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations.ConsiderationsBu

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