Fiscal Year
A 12-month accounting period that ends on the last day of any month other than December. Used mainly by businesses and some trusts, not by individual taxpayers.
A fiscal year is a 12-month accounting period that does not correspond to the calendar year. A fiscal year can end on the last day of any month except December — for example, July 1 through June 30. Some entities use a 52-53 week fiscal year that always ends on the same day of the week.
Most individuals must use the calendar year for tax purposes. However, businesses — especially corporations, partnerships, and trusts — may elect or be required to use a fiscal year. S corporations and partnerships generally must conform to the tax year of their owners, which usually means the calendar year.
The filing deadline for a fiscal-year entity is the 15th day of the 4th month after the fiscal year ends (for corporations) or the 15th day of the 3rd month (for partnerships and S corporations). Understanding fiscal years is mainly relevant if you own a business, receive K-1 income from a partnership, or work with entities that operate on a non-calendar schedule.
How it works
A fiscal year is any 12-month accounting period that ends on the last day of a month other than December, and it exists mainly so businesses can align their tax reporting with their natural operating cycle rather than the calendar. A retailer, for example, might choose a fiscal year ending in late January so the busy holiday season falls entirely within one reporting period instead of being split across two.
You are most likely to meet a fiscal year not on your own return but through a K-1 you receive from a partnership, S corporation, or trust that operates on one — the income reported on that K-1 reflects the entity's fiscal year, which may not line up neatly with your own calendar-year return. Corporations choosing a fiscal year file by the 15th day of the 4th month after it ends, while partnerships and S corporations file by the 15th day of the 3rd month.
Most individuals cannot simply choose a fiscal year — the default is the calendar year, and switching requires IRS permission in most cases. Partnerships and S corporations generally must conform their tax year to their owners' tax year, which usually forces them back to the calendar year unless they can show a legitimate business purpose for a different one. Some entities instead use a 52-53 week fiscal year, which always ends on the same weekday, adding a further wrinkle when reconciling entity-level and individual-level reporting periods.
Example: a K-1 from a fiscal-year partnership
A partnership operates on a fiscal year running July 1 through June 30, rather than the calendar year. An individual partner uses the standard calendar tax year for their own personal return.
Income earned by the partnership during its fiscal year ending June 30, 2026 shows up on the partner's K-1 and is reported on the partner's calendar-year 2026 individual return, even though half of that fiscal year, July through December 2025, technically falls in a different calendar year.
Frequently asked questions
Can an individual choose a fiscal year instead of a calendar year?
Why would a business pick a fiscal year that doesn't end in December?
Do partnerships and S corporations get to pick any fiscal year they want?
Related Terms
Tax Year
The 12-month accounting period for calculating and filing taxes. For most individuals, the tax year is the calendar year (January 1 through December 31).
Tax Return
The form(s) you file with the IRS to report income, claim deductions and credits, and calculate your tax liability or refund. For individuals, this is Form 1040.