Friday, September 25, 2015

Basic Tax Periods

Here are some basics on Tax Accounting Periods:

What are the accounting periods? 

Yearly (or annual) accounting periods are 12-months each and are used to calculate taxable income. In accounting, these periods are known as the “taxable year”.

What are some parameters of accounting periods:

  • For partnerships, all participating partners must use the same taxable year
  • S Corporations typically use the calendar year as it’s tax accounting period
  • Individual Taxpayers generally do use calendar year; fiscal year is sometimes used if records are maintained adequately,
  • Once an accounting period has been selected, IRS consent must be obtained to change the accounting period

Learn more:

Introduction - CFP | Investopedia

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