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Calendar Year vs. Fiscal Year. A calendar year always runs from January 1 to December 31. A fiscal year, by contrast, can start and end at any point during the year, as long as it...
The fiscal year, a period of 12 months ending on the last day of the month, does not line up with the traditional calendar year. Learn when you should use each.
Using a different fiscal year than the calendar year lets seasonal businesses choose the start and end dates that better align with their revenue and expenses. This means a fiscal year can help present a more accurate picture of a company's financial performance.
A fiscal and a calendar year are two different things. A fiscal year is the 12-month accounting period for a business cycle. A fiscal year-end date is different than the end of the calendar year. It’s the financial reporting cycle business uses for tax purposes. That’s one of the key differences.
The critical difference between a fiscal year and a calendar year is that the former can start on any day and end precisely on the 365th day. In contrast, the latter begins on the first of January and ends every year on the 31st of December.
Fiscal years can differ from a calendar year and are important for accounting purposes because they are used when filing taxes, for budgeting, and for financial reporting requirements.
In roughly two-thirds of all countries, the government’s fiscal year is the calendar year. Most other countries begin their year at a different calendar quarter—e.g., April 1 through March 31, July 1 through June 30, or October 1 through September 30.
A fiscal year keeps income and expenses together on the same tax return, while a calendar year splits them into two. Calendar years enable easier year-to-year comparisons between businesses, compared to two companies using different fiscal years.
A fiscal year consists of 12 months or 52 weeks and might not end on December 31. A period that is set from January 1 to December 31 is called a calendar year. Here is an example of the difference between a calendar year end and a fiscal year end:
Choosing to use a calendar year or a fiscal year for accounting and bookkeeping purposes can impact your organization in more than one way. In this article, we discuss the difference between the two tax years, special considerations for nonprofits, and how to change your selection.