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Understanding income tax years

On Behalf of | Jan 28, 2015 | Income Taxes

For individuals living in Georgia and anywhere else in the United States, it is very important to know when the income tax year begins. For most people, the tax year is 12 consecutive months and runs from Jan. 1 to Dec. 31, and tax returns are due by April 15 of the next year. However, there are exceptions.

The calendar tax year is to be followed by individuals who have no annual accounting period, keep no books, are on a current tax year that does not qualify as a fiscal year, or must use a calendar year as required by a stipulation of the Income Tax Regulations or IRS code. If an individual files taxes with the calendar year and later changes his or her filing status to shareholder in an S corporation, partner in a partnership, or sole proprietor, he or she is required to use the calendar year unless the IRS approves a fiscal year or provisions permit the change to be made without approval.

When first filing income taxes, individuals either follow the standard calendar year or adopt a fiscal tax year. By paying estimated taxes, filing for an employee identification number or filing an application to extend the period for submitting an income tax return, individuals are not adopting any kind of tax year.

Tax law is complicated, and as a result, many individuals elect to have a lawyer provide assistance with filing taxes. Discussing one’s situation with a tax lawyer could help the individual maintain compliance and avoid any unnecessary taxation or penalties for delayed or incorrect filings.