Fiscal Year - FY

Loading the player...

What is a 'Fiscal Year - FY'

A fiscal year (FY) is a period that a company or government uses for accounting purposes and preparing financial statements. A fiscal year may not be the same as a calendar year, and for tax purposes, the Internal Revenue Service (IRS) allows companies to be either calendar-year taxpayers or fiscal-year taxpayers. Fiscal years are commonly referred to when discussing budgets and are often a convenient period to reference when comparing a government's or company's financial performance over time.

BREAKING DOWN 'Fiscal Year - FY'

According to the IRS, a fiscal year consists of 12 consecutive months ending on the last day of any month except December. For example, in terms of tax reporting, a fiscal year may run from Feb. 1 to Jan. 31. Alternatively, instead of observing a 12-month fiscal year, U.S. taxpayers may observe a 52- to 53-week fiscal year, where each year rotates between being 52 or 53 weeks long.

IRS Deadlines for Fiscal-Year Taxpayers

The default IRS system is based on the calendar year, so fiscal-year taxpayers have to make some adjustments to the deadlines for filing certain forms and making certain payments. In particular, while most taxpayers must file by April 15 following the year for which they are filing, fiscal-year taxpayers must file by the 15th day of the fourth month following the end of their fiscal year. To illustrate, a business observing a fiscal year from June 1 to May 31 must submit its tax return by Sept. 15.

Choosing Between Calendar Years and Fiscal Years

In the United States, eligible businesses can adopt a fiscal year for tax reporting purposes simply by submitting their first income tax return observing that fiscal tax year. At any time, these businesses may elect to change to a calendar year. However, businesses that want to change from a calendar year to a fiscal year must get special permission from the IRS or meet one of the criteria outlined on Form 1128, Application to Adopt, Change, or Retain a Tax Year.

How to Refer to a Fiscal Year

Fiscal years are referenced by their end date or end year. For example, the federal government's fiscal year begins on Oct. 1 and ends on Sept. 30. To reference one of the government's fiscal years, a speaker may say, "the fiscal year ending Sept. 30, 2016." Similarly, if a speaker referred to government spending that occurred on Nov. 15, 2015, she would label that as an expenditure for the 2016 fiscal year.

RELATED TERMS
  1. Year

    A period of time that is comprised of 12 consecutive months. ...
  2. Calendar Year

    The one-year period that begins on January 1 and ends on December ...
  3. Short Tax Year

    A tax year, whether fiscal or calendar, that is less than one ...
  4. Fiscal Year-End

    The completion of a one-year, or 12-month, accounting period. ...
  5. Last Fiscal Year - LFY

    The most recent 12-month accounting period that a business uses ...
  6. Fiscal Neutrality

    Fiscal neutrality occurs when taxes and government spending are ...
Related Articles
  1. Investing

    Explaining the Fiscal Year

    Fiscal year is a term most often used in accounting and budgeting to denote the beginning and ending dates for one year of business activity.
  2. Markets

    What is the Fiscal Year-End?

    It’s an important consideration for determining taxes, expenses and other financial matters.
  3. Investing

    Wal-Mart Stock: An Earnings Case Study (WMT)

    Examine Wal-Mart's earnings history and outlook. Analyze financial data to determine which factors are driving performance and influencing analyst estimates.
  4. Markets

    Microsoft Stock: An Earnings Case Study (MSFT)

    Examine Microsoft's historic and forecast earnings. Analyze the factors driving recent EPS performance and shaping consensus analyst estimates.
  5. Markets

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  6. Markets

    Fiscal Policy

    Fiscal Policy is the combined governmental decisions regarding its taxing and spending.
  7. Investing

    Nike Stock: An Earnings Case Study (NKE)

    Analyze Nike's historical earnings to determine which factors are driving profit. Assess income performance and consensus analyst outlook for Nike.
  8. Insights

    Apple Stock: An Earnings Case Study (AAPL)

    Discover an earnings case study on Apple, and learn about its EPS and revenue growth rates, and what analysts are projecting for Apple in 2016 and 2017.
  9. Markets

    A Look At Fiscal And Monetary Policy

    Fiscal and monetary policies provide our government and the Federal Reserve with two powerful tools to regulate the economy.
  10. Markets

    A Look At Fiscal And Monetary Policy

    There's a debate over which policy is better for the economy. Find out which side of the fence you're on.
RELATED FAQS
  1. How successful is fiscal policy in guiding the national economy?

    See why it is difficult to evaluate the impact of fiscal policy on the national economy and how fiscal tools have failed ... Read Answer >>
  2. How can a change in fiscal policy have a multiplier effect on the economy?

    Learn about how changes in fiscal policy have a multiplier effect on the economy. The goal of expansionary fiscal policy ... Read Answer >>
  3. Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given ... Read Answer >>
  4. What is the difference between a quarter and a year in finance?

    Examine the difference between a fiscal quarter and a fiscal year. Learn why investors examine both quarterly and annual ... Read Answer >>
  5. Why do companies report earnings at different times?

    This is a question that puzzles many people because, unlike individuals, who must file their taxes to the IRS every year ... Read Answer >>
  6. What's the difference between monetary policy and fiscal policy?

    Learn how monetary policy refers to bank actions to control interest rates and money supply, while fiscal policy refers to ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center