If you’re new to the business world, then you might not be familiar with the concept of a fiscal year. After all, it doesn’t totally align with a regular calendar year as is commonly understood. By working with the expert accountants here at The Harding Group, you can help ensure your business remains viable for years to come. Let’s find out more!
The Timeline of a Business-Related Fiscal Year
Even if your agency has been around for a year and a half, there are still bound to be numerous growing pains. One of those issues is likely caused by figuring out what a fiscal year is supposed to be. After all, you’ll need to determine how to track your expenses, profits, and taxes on more than a month-to-month basis. Otherwise, you might not be able to commit to any contracts that can stretch a year or two into the future. That’s bad for business, and when it comes to business advising, you’re better off playing it as safe as possible. While fiscal years are based on a single year, that “year” might not coincide with the typical January-December cycle. Businesses and governments alike depend on the fiscal year to consolidate financial reports and change the budgets they previously set as needed. The season and the industry are two big factors that come into play when you need to set a fiscal year.
Establishing Your Fiscal Year Structure
Now that you have a better understanding of how a fiscal year works, we can move onto the next piece of business advising we have for you. Four-month quarters might make more sense than three-month quarters. It ultimately depends on the structure of your business, and how you communicate with the Internal Revenue Service. That is how the IRS will be able to contact you when tax season arrives; this is also when you are required to file relevant tax returns.
Ways to Reset the Fiscal Year
Let’s say that the previous fiscal calendar you set no longer works for you. Luckily, there are ways you can change them as you need to; this is possible as long as you comply with IRS rules. Consult the by-laws or operating agreements of your business as a first step. You’ll also need the IRS to approve this business plan, with Forms 1128 and 8716 being the most important.
trust the professionals at the harding group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.