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Determining the Right Fiscal Year

Posted October 2nd, 2014 by bbsadmin & filed under Government.

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The Internal Revenue Service requires you to report taxable income for your business, as well as business expenditures. The IRS allows businesses to determine what their taxable year will be. For example, a business can use a calendar year. However, the company could also make reports to the IRS based on a short tax year or based on a fiscal tax year.

Corporations and large businesses frequently operate on a fiscal tax year, which simply means that the company picks a date to start their new fiscal year that is not January 1.irs Operating on a fiscal year basis can be beneficial if you operate a seasonal business or if you spend a lot of money in one calendar year and don’t earn the income from those expenditures until the next year.

A professional bookkeeping service can help you to determine if you should operate on a fiscal, rather than a calendar, year. Your bookkeeper can also help to decide when your fiscal year should start and end, and which year profits and losses should be allocated to.

Call BBS today to learn more about how we can create the right bookkeeping system for your business. (801) 419.0403. Like us on FaceBook, follow us on Twitter.