What does Tax Year mean?
A tax year refers to an accounting period during which taxable income is calculated and income tax is paid through the filing of a tax return. Tax years must be 12 consecutive months, but the ending date for the 12-month period varies depending on the circumstances.
For an individual, a tax year is the same as a calendar year, the 12-month period running from January 1 through December 31. Therefore, when taxpayers are filing their income tax due April 15, 2014, they are filing their taxes for the 2013 tax year.
For a business, a tax year can be the same as a calendar year or a fiscal year. A fiscal year is typically the 12-month period ending on the last day of any month other than December 31. However, a tax year can also be based on a fiscal year that ends on a specific day of the week, such as the Friday closest to January 31. Under such a system, some tax years will have 52 weeks in them while other tax years will have 53 weeks in them.