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ExpressTaxExempt Blog

Tuesday, March 11, 2014

What Is A Fiscal Year?

Determining when to file your Form 990 with Express990 depends on when you start your fiscal year. You would be surprised at how many different interpretations there are for a Fiscal Year. Even more confusing a fiscal year is not one established time frame for businesses, organizations, or the government. To best understand what a fiscal year is...let's get to the basics first then build a better understanding form there.

The Basics:
Fiscal Year - a 12-month period used by a government, business, or organization to calculate how much money is being earned, spent, etc. A fiscal year is sometimes referred to as a budget year. Fiscal years vary between businesses and countries. Nevertheless, the fiscal year is identical to the calendar year for about 65% of publicly traded companies in the United States.

Fiscal Year Fun Facts: 
  • - The first known fiscal year was in 1843. 
  • - Many universities have a fiscal year which ends during the summer, both to align the fiscal year with the school year because the school is normally less busy during the summer months.
  • - Some companies choose to end their fiscal year on the same day of the week, such day being the one closest to a particular date (ex. the Friday closest to December 31). Under such a system, some fiscal years will have 52 weeks and others 53 weeks.

Fiscal Year and the United States Government:
The United States federal government's fiscal year is a 12-month period beginning on October 1st and ending on September 30th of the following calendar year. The identification of a fiscal year is the calendar year in which it ends; thus, the current fiscal year is 2014 - shortened to FY2014. Prior to 1976, the fiscal year began on July 1st and ended June 30th of the following year.

To Sum It Up:
Just remember a fiscal year is any yearly period without regard to the calendar year, at the end of which a business, organization, government, etc., determines its financial condition.

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