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Publication 583

Designating a Tax Year(p5)

You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. A tax year is usually 12 consecutive months. There are two kinds of tax years.
  1. Calendar tax year. A calendar tax year is 12 consecutive months beginning January 1 and ending December 31.
  2. Fiscal tax year. A fiscal tax year is 12 consecutive months ending on the last day of any month except December. A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month.
If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval.
You must use a calendar tax year if:
For more information, see Publication 538, Accounting Periods and Methods.

First-time filer.(p5)

If you have never filed an income tax return for your business, you can adopt either a calendar tax year or a fiscal tax year. Although, some partnerships and S corporations must use a particular tax year. See Publication 538 for more information. You adopt a tax year by filing your first income tax return using that tax year. You have not adopted a tax year if all you did was one or more of the following.

Changing your tax year.(p5)

Once you have adopted your tax year, you may have to get IRS approval to change it. To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. You may have to pay a fee. For more information, see Publication 538.