What's the Difference Between a Fiscal Year and a Calendar Year for Taxes?

A business can measure its tax year using either a calendar year or a fiscal year, and the choice affects when returns are filed and taxes are due. A calendar year runs from January 1 to December 31, and most individuals and many small businesses use this approach because it aligns with personal tax filing. A fiscal year is any 12-month period that ends on the last day of any month other than December — for example, a business might have a fiscal year ending June 30. Certain businesses choose a fiscal year because it better aligns with their natural business cycle, such as retailers who want their year to end after the holiday season rather than in the middle of it. Tax returns for a fiscal year are due on the 15th day of the fourth month after the fiscal year ends, so a June 30 fiscal year business would have an October 15 due date.