1. Money

Fiscal Year

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Definition:

A fiscal year is your business's annual reporting period. All kinds of reports are based on the fiscal year, including taxes.

The fiscal year is generally a twelve month period – although the fiscal year period may be shorter for a business that has just started or for a business that ends.

For most businesses, the fiscal year runs from January 1st through December 31st. In Canada, some businesses may have different fiscal year periods. Corporations can choose to have fiscal year periods that end on any date. Sole proprietorships and partnerships composed of members that are all individuals can also choose to have a different fiscal year end period.

You may want to have a different fiscal year, for instance, if your business is seasonal, choosing a fiscal year end date to coincide with a slack time in your business.

If you start a business that is a sole proprietorship, a partnership such as the one described above, or a corporation, you can choose to have a different fiscal year by filling out and filing Form T1139, Reconciliation of Business Income for Tax Purposes.

If you are operating a business with a traditional fiscal year period and want to change it, see How Do I Change my Fiscal Year End?

Choosing a different fiscal year end date should be considered carefully, however, because it will affect all your other reporting obligations. For instance, if your business is registered for the GST/HST, your GST/HST reporting periods, filing and remitting due dates will be affected.

Also Known As: Fiscal period.
Common Misspellings: Fiscel year, fiskal year.
Examples:
Verity chose to have a fiscal year end date of July 31st for her ski shop business so she could prepare her income taxes during her business's slow season.

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