A tax year is the 12‑month period used to report income, expenses, deductions, credits, and tax liability to the IRS.
The tax year determines which income is reported on a return and when the return is due.
🧩 Types of Tax Years
🟢 Calendar Year
- Runs from January 1 through December 31
- ✅ Used by most individual taxpayers
- 📅 Tax returns are typically due by April 15 of the following year
🟡 Fiscal Year
- Any 12‑month period that ends on the last day of a month other than December
- Commonly used by businesses, partnerships, estates, trusts, and certain organizations
- 🔄 IRS approval is required to change from a calendar year to a fiscal year
🧠 Why the Tax Year Matters
The tax year:
- ✅ Determines when income is reported
- ✅ Determines when deductions and credits may be claimed
- ✅ Affects filing deadlines and extensions
- ✅ Ensures consistent and accurate financial reporting
- ✅ Impacts tax planning strategies (timing income and expenses)
📌 Example
If you earned income between:
January 1, 2025 – December 31, 2025
You report that income on your 2025 tax return, which is generally due by:
📅 April 15, 2026 (unless an extension is filed).