Billing Software Kerala
Sunday, October 21, 2018
'Tax Year' Aster Billing
WHAT IS A 'Tax Year'
A tax year refers to the 12-month period covered by a particular tax return. The Internal Revenue Service allows some flexibility in determining the start and end dates of a tax year, and it is not necessarily the same period as a fiscal year.BREAKING DOWN 'Tax Year'A tax year is an annual accounting period used by a taxpaying individual or firm for tax purposes. The U.S. Internal Revenue Service (IRS) allows most businesses to use either a calendar year or the firm’s fiscal year as its tax year. Exceptions to this are firms that are required to use the calendar year ending December 31 as their tax year. These include sole proprietorships and single-member LLCs. These firms are required to end their tax year on December 31 because they generally pay taxes as an extension of their single owner.
Whatever method is used to define a tax year, the IRS requires that all firms end their tax year on a quarterly basis, so all tax years should end on March 31, June 30, September 30 or December 31. The IRS identifies firms with non-calendar year tax years by their selected tax year end date. The IRS discourages businesses from changing their treatment of the tax year except in the first or last year of a business. Written IRS approval is required to do so.
Individual Taxpayers’ Federal Tax Year
Individuals generally use a December 31 tax year, with an annual return due on April 15 of the following year. When the 16th Amendment was passed in 1913, granting taxation authority to the federal government, Congress designated February 1 as tax filing day. This date was moved progressively backward to where it is today, on April 15. Some commentators have suspected that this has allowed the government to hold onto taxpayers’ money longer. Whatever the case, the movement from February to March to April has coincided with an increase in the pool of eligible taxpayers. When the 16th Amendment was passed, a small number of very wealthy individuals was expected to pay federal tax. The pool of taxpayers has grown significantly since then
.State Tax Years
Every state handles taxation independent of the federal system, but most that do impose income taxes use April 15 as their required filing date. Virginia is one exception, with a filing deadline of May 1. Several states that do not charge income taxes impose taxes on other revenue, such as stock dividends. New Hampshire, which has no income or sales tax, compensates by charging a relatively high property tax. New Hampshire property tax rates are set annually in November, and the property tax year runs from March 21 to April 1 for all property owners
.by
Aster billing
No comments:
Post a Comment
Newer Post
Older Post
Home
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment