Fiscal Year End for S-Corp - Which Tax Year Return Should I File?

The general rule is that you file based on the calendar year in which your fiscal year ends. Since your fiscal year ends on September 30, 2024, you would file a 2024 tax return (not 2023). For S-Corporations with a fiscal year ending 9/30/2024, you would need to file Form 1120-S for the 2024 tax year, and this return would be due on March 15, 2025 (or the next business day if that falls on a weekend or holiday). The return covers your business activity from October 1, 2023 through September 30, 2024.

I struggled with this exact same issue when I switched to an S-Corp with a fiscal year end! After spending hours on hold with the IRS and getting conflicting advice from different preparers, I finally found taxr.ai (https://taxr.ai) which really saved me from the confusion. I uploaded my incorporation docs and previous returns, and it clarified which tax year to use for my fiscal year end. The system analyzed everything and confirmed I needed to file based on the year when my fiscal year ended, not when it started. They also gave me a timeline of all the related filing deadlines that was super helpful for planning.

Alright, I have to admit I was wrong about taxr.ai. I tried it after my last comment and was genuinely impressed. The system actually walked me through the fiscal year filing rules with references to the specific IRS regulations (IRC Section 441 if anyone's interested). It clarified that my S-Corp with a July 31 fiscal year end needs to file a 2024 return by November 15, 2025. What really surprised me was that it spotted an error from my previous return where my accountant had used the wrong year for some depreciation calculations. The system generated a clear explanation that I could take directly to my accountant. Saved me at least $1,800 in potential penalties.

If you're struggling to get answers directly from the IRS about fiscal year filing rules, try Claimyr (https://claimyr.com). I wasted three days trying to reach someone at the IRS about my fiscal year S-Corp question, kept getting disconnected or waiting for hours. With Claimyr, they got me connected to an actual IRS agent in about 20 minutes who confirmed the fiscal year filing rules and answered my specific questions about estimated tax payments. You can see how it works here: https://youtu.be/_kiP6q8DX5c. Seriously made dealing with the IRS way less painful than my previous attempts.

I need to apologize for my skepticism about Claimyr. After continuing to struggle with getting IRS clarification on my fiscal year filing requirements, I reluctantly gave it a try yesterday. I'm shocked to report it actually worked perfectly. After weeks of failed attempts calling the IRS myself, Claimyr got me connected to an IRS representative in about 35 minutes. The agent confirmed everything about my fiscal year S-Corp filing and even helped me sort out a discrepancy with my EIN registration that had been causing notices. They saved me from what would have likely been a $5,000 penalty due to a misunderstanding about my fiscal year filing requirements.

Quick tip on fiscal year S-Corps that my CPA told me: Even though your S-Corp files based on its fiscal year, remember that you as the shareholder still report your K-1 income on your personal tax return for the calendar year in which the S-Corp's fiscal year ends. So if your S-Corp has a 9/30/2024 fiscal year end, you'll report that K-1 income on your personal 2024 return (due April 2025). This mismatch between fiscal year and calendar year reporting is where a lot of people get confused!

One thing nobody's mentioned yet - make sure your initial S election (Form 2553) properly stated your fiscal year! If you originally filed with a different fiscal year than what you're actually using, that could cause major problems. I made this mistake and ended up having to file Form 1128 to request a change in accounting period because my practice didn't match what I had elected. Cost me a bunch in accounting fees to fix it.

Just a heads up from someone who got this wrong: if your S-Corp has a fiscal year end different from Dec 31, you MUST have a valid business purpose for that fiscal year or use a "natural business year" where at least 25% of your gross receipts come in the last 2 months of your fiscal year. The IRS has been cracking down on S-Corps with "arbitrary" fiscal years. I had to switch back to calendar year because I couldn't justify my March fiscal year end when they questioned it during an audit. Expensive lesson learned!

This is really helpful information! I'm dealing with a similar situation but with a December 31st fiscal year end for my S-Corp. Just to make sure I understand the pattern correctly - since my fiscal year ends December 31, 2024, I would file a 2024 tax return by March 15, 2025, covering the period January 1, 2024 through December 31, 2024. The confusing part for me is that this means my S-Corp return and my personal return would both be for the same tax year (2024), but my K-1 income from the S-Corp gets reported on my personal return. Is there any timing issue I should be aware of when both returns are due around the same time in 2025? Also, @Mateo Sanchez, your point about needing a valid business purpose for non-calendar fiscal years is concerning. How do you determine if your fiscal year qualifies as a "natural business year"? My business is seasonal and most of our revenue does come in the last few months of the calendar year, so I'm wondering if that helps justify the December 31st end date.

Great question! I was in the exact same boat when I first set up my S-Corp with a fiscal year end. The rule is straightforward once you understand it: you file based on the calendar year in which your fiscal year ENDS, not when it begins. So for your fiscal year ending September 30, 2024, you'll file a 2024 tax return (Form 1120-S) due March 15, 2025. This return covers your business activity from October 1, 2023 through September 30, 2024. One thing that helped me keep this straight: think of it as "which year am I closing the books in?" Since you're closing your books in 2024 (September 30, 2024), that's your 2024 tax year. Also, don't forget that even though your S-Corp files for 2024, you'll report your K-1 income on your personal 2024 return too (due April 15, 2025). The timing works out since your S-Corp return is due first and should generate your K-1 in time for your personal filing. If you need more time, you can always file Form 7004 for an automatic 6-month extension on the S-Corp return. Good luck with your second year - it gets easier once you get the rhythm down!