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How should I arrange my business’ accounting period?

There are certain acceptable tax years: 

  1. The calendar year 
    1. Adopt this year if the taxpayer has no books, no annual accounting period, the present tax year does not qualify as a fiscal year, or you are required to use a calendar year by the Internal Revenue Code. 

  2. A fiscal year

    1. 12 consecutive months ending on the last day of any month except December or it is considered a calendar year. 

  3. 52-53 week tax year 

    1. This period must always end on whatever date this same day of the week last occurs in a calendar month or whatever date this same day of the week falls that is nearest to the last day of the calendar month. 

Once one of these options has been chosen, in order to change tax years, the taxpayer must get approval from the IRS by filing Form 1128 by the due date of the tax return for the short period required to effect the change. 

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