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Fiscal Year vs. Tax Year vs. Calendar Year: Differences, Details, and Deadlines

January 18, 2018

  • A fiscal year is used for accounting purposes
  • A calendar year runs from January 1 to December 31
  • You file your 2017 taxes in 2018
2 min read

A year is a year, right? Well, it can get more complicated than that when you’re talking about money and taxes. Here’s what you need to know about the differences between fiscal, calendar, and tax years, as well as some important tax filing deadlines.

The basic definitions

A fiscal year is any period of 365 days*, used for accounting purposes. It could be January 1 to December 31, but it could just as easily run from June 30 to July 1 of the following year. All that matters is that it’s any 12-month period used by a business or organization to account for and report its finances.

The calendar year in which a fiscal year ends tells you which fiscal year you are talking about. For instance, the U.S. federal government starts its fiscal year on October 1, and ends its fiscal year on September 30. So the 2018 fiscal year would begin on October 1, 2017, and finish September 1, 2018.

Sometimes a fiscal year is also called a financial year, but fiscal year is the more common term in the United States.

A calendar year extends from January 1 to December 31. Yep, it’s that simple. The year on a physical calendar is a calendar year.

A tax year can be a calendar tax year or a fiscal tax year, but what you’re probably most interested in is a tax year as it relates to your income taxes.

When used in reference to personal income taxes, a tax year means the calendar year that income taxes were withheld, or the year for which you’re filing your income tax return. Filing your taxes in early 2018? The fiscal year you are reporting is 2017. Think of it this way: the entirety of a fiscal calendar year needs to be completed, and then you can get down to your tax business.

A fiscal year is also then broken down into quarters, which are any three-month period. Generally speaking the first quarter starts January 1 and ends March 31, though come companies may follow other schedules.

Deadlines

The distinction between different kinds of years really becomes most useful when discussing tax-filing deadlines.

The most important deadline each year is the date by which you need to have filed your taxes. This date, often called Tax Day, is April 15, or the first business day following April 15 if it falls on a weekend. For 2018 Tax Day is April 17.

Business deadlines are slightly different, as they tend to file their taxes on a quarterly basis.

You may know that you file your taxes for the 2017 tax year in 2018, but do you know you can contribute to your IRA until April of the following year? For instance, the IRA contribution deadline for the 2017 tax year is April 17, 2018.

Another fun fact: even if you’re an early bird and file your taxes well before the deadline, you can still contribute to your Roth IRA up until the IRA contribution deadline in April. If you want to contribute to your Traditional IRA after you’ve already filed you will need to amend your return.

By Clare Edgerton

*366 days on leap year.

Sources:

IRS.gov:

The Balance

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