S-Corp with Fiscal Year End June 30th - Which Tax Year Return Do I File?

Thanks for the explanation. I've heard that S-Corps aren't actually allowed to have fiscal years different from their owners unless there's a "business purpose." Is that true? I'm the only shareholder and my personal taxes are calendar year.

That's an excellent point. S-Corporations generally must use a calendar year unless they can establish a business purpose for a different fiscal year. Common approved business purposes include natural business cycles (like seasonal businesses) or matching a key customer/industry cycle. If you didn't get specific IRS approval for your fiscal year via Form 1128, you might actually be required to use a calendar year. This is something you should verify immediately, as using an unauthorized fiscal year can create complications. If your previous accountant set this up, check if they filed for and received proper approval from the IRS.

Does it work for other entity types too? I have an LLC taxed as a partnership with a Sept 30 year-end and always get confused about which year to file under.

I'm skeptical about these online tools. Does it actually access your IRS filing history to verify if proper forms were submitted for the fiscal year election? Seems like it would need that info to really know if you're compliant.

It absolutely works for partnerships and other entity types too. The system is designed to handle various tax structures including LLCs taxed as partnerships. You just upload your formation documents and it identifies the correct filing requirements based on your specific situation. For your question about IRS filing history - it doesn't directly access IRS records, but it analyzes your uploaded documents (like previous returns and formation papers) to determine if proper procedures were followed. In my case, it recognized from my Articles of Incorporation and previous returns that I needed to verify Form 1128 approval, which my accountant confirmed had been properly filed years ago. The tool essentially serves as a checks-and-balances system that catches these compliance details.

How does this service actually work? Does it just keep auto-dialing the IRS until it gets through? Not sure how this would be any different than me just calling repeatedly.

I don't buy it. The IRS phone system is deliberately designed to limit calls. There's no "secret backdoor" to get through faster. Sounds like you got lucky or they're using some questionable method that could get shut down.

It doesn't just auto-dial. Their system navigates the complex IRS phone tree and holds your place in line so you don't have to. When they reach a live agent, they call you and connect you directly. It's the difference between you personally sitting on hold for hours versus their system doing the waiting for you. No "secret backdoor" involved - they're just using technology to make the standard process more efficient. It's like using a shopping service instead of going to the store yourself. The IRS doesn't care who waits on hold, they just respond to the next caller in queue. I understand the skepticism, but after wasting entire mornings trying to reach someone, having them hold my place in line while I continued working was absolutely worth it.

Thanks for bringing this up! So for my situation with fiscal year ending 6/30/2024, I would mark "2023" on all the forms since that fiscal year began in July 2023, correct? Do I also need to write the actual dates of my fiscal year somewhere on the forms?

Yes, you would mark "2023" on the forms since your fiscal year began in July 2023. And absolutely, you need to clearly indicate your fiscal year dates on the return. On Form 1120-S, there's a specific area at the top of the form where you enter the tax year. You'll check the "fiscal year" box and enter the beginning and ending dates (07/01/2023 - 06/30/2024). This is critical - if you don't clearly indicate your fiscal year dates, the IRS will process it as if you're filing for a calendar year, which would cause all kinds of problems.

Not a stupid question at all. Fiscal years can provide timing advantages for tax planning. By ending your fiscal year on 9/30, you get an extra 9 months to implement tax strategies before your tax year closes. This can be helpful for deferring income, timing expenses, etc. However, remember that S-Corps pass income through to shareholders' personal returns, which are typically calendar year. This mismatch can create complexity. Also, as others mentioned, you need a legitimate business purpose and IRS approval via Form 1128. Seasonal businesses or those with natural business cycles often have valid reasons for fiscal years.

This is exactly the kind of clear explanation I needed when I was first dealing with this issue! The timing aspect with K-1s is something that really caught me off guard initially. I didn't realize that even though my fiscal year ended in June 2024, my shareholders would be reporting that income on their 2023 personal returns filed in April 2024. It actually created some confusion because some of my business expenses and income occurred well into 2024, but it all gets reported as "2023" activity. The timing mismatch between fiscal year S-Corps and calendar year individual returns definitely requires some planning ahead, especially when communicating expectations to shareholders about when they'll receive their K-1s and which tax year they'll need to report the income under.

Great question about the timing of elections! For a newly elected S-Corp, you typically need to establish your fiscal year before or simultaneously with your S-election. If you want a fiscal year other than calendar year, you should file Form 1128 (Application to Adopt, Change, or Retain a Tax Year) along with your Form 2553 (Election by a Small Business Corporation) to avoid any complications. Regarding multiple entities with different fiscal years - this can actually create some strategic opportunities but also adds complexity. You'll need to be very careful about timing distributions and inter-company transactions to optimize tax planning across both entities. I'd strongly recommend working with a CPA who has experience with multi-entity structures, as the coordination between different fiscal years can impact your overall tax liability and cash flow planning. The key is making sure you're not creating any unintended timing mismatches that could trigger unexpected tax consequences.

This is such a valuable point about estimated tax payments! I wish someone had mentioned this when I first set up my fiscal year S-Corp. I also made the mistake of following calendar year payment dates initially and it created confusion with my bookkeeping. One thing to add - if you're also paying yourself a salary through the S-Corp, make sure your payroll tax deposits align with your fiscal year reporting as well. The IRS can get really picky about timing mismatches between your corporate tax year and employment tax reporting if they don't line up properly. Your documentation tip is spot-on too. I've had to dig up my Form 1128 approval multiple times for various business purposes. Now I keep digital copies in multiple places and always include a cover sheet explaining the fiscal year election when I provide tax documents to third parties.

This is incredibly important information that I hadn't considered! I'm actually in the process of potentially bringing on an investor to my S-Corp that currently operates on a fiscal year ending August 31st. Do you know if there are specific ownership percentage thresholds that trigger this review, or does any change in shareholders potentially invalidate the fiscal year election? Also, did you have to suspend your fiscal year operations during the re-approval process, or were you able to continue operating under the existing fiscal year while the Form 1128 was pending? I'm wondering if I should get this sorted out before finalizing any investment agreements to avoid complications down the road.