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Key Takeaways
In the US, tax returns covering the 2025 calendar year will be due on April 15, 2026.
For businesses with a fiscal year that doesn't align with the calendar year, the tax return is due on the 15th day of the fourth month after the end of your fiscal year.
You can request an automatic six-month extension using Form 7004. This only extends the time to file, not to pay.
Tax deadlines and obligations can sneak up on you, leading to hefty fines and unnecessary disruption to your business operations. These penalties are all too common – in 2024 alone, the IRS imposed over $20 billion in civil penalties on business income taxes.
To keep things running smoothly and stay compliant, you need to know the difference between a fiscal year-end and a calendar year-end, and stay on top of key tax deadlines.
In this guide, we’ll help you navigate the 2025 tax season with confidence – covering key deadlines, tax tips, and practical steps, so you can focus on growing your business.
What is a Fiscal Year, and How Does it Differ From the Calendar Year?
A fiscal year (also called a financial year) is a 12-month period used for accounting and tax purposes, which may or may not match the calendar year. Here’s the difference:
- Calendar Year: January 1 – December 31. Many small businesses, especially sole proprietors, use this because it’s simple and matches their personal taxes.
- Fiscal Year: Any 12-month period, such as July 1 – June 30.
Each business can select a fiscal year that best fits its operational and financial needs, as long as it complies with IRS regulations. Fiscal years are frequently chosen to align with business cycles, offering strategic advantages for financial reporting and tax planning.
When Does the Fiscal Year End in 2025?
Your fiscal year-end depends on the 12-month period you’ve selected for your business. Some examples:
- January 31: Ideal for retailers capturing holiday sales.
- March 31 : Aligns with the end of the first quarter.
- June 30 : Aligns with the end of the second quarter.
- September 30: Aligns with the federal government's fiscal year-end.
- December 31 : Matching the calendar year-end.
The U.S. federal government's fiscal year is relevant as an example of a non-calendar fiscal year: it begins on October 1 and ends on September 30 of the following year. For example, fiscal year 2024-25 started on October 1, 2024, and will conclude on September 30, 2025.
Not sure when your fiscal year starts and ends? Check your IRS filings or consult your accountant to confirm your chosen period.
Why It’s Important for Small Businesses
Your fiscal year-end affects several crucial areas of your business operations. Here’s why it matters:
1. Accurate Financial Reporting
Choosing a fiscal year-end that fits your business cycle — like after your busy season — helps you see a clearer picture of your financial performance. This timing makes year-over-year comparisons more accurate, so you can make better decisions and plan more strategically.
2. Smarter Tax Planning
Strategic tax planning can help you lower your tax burden. By carefully timing when you report income and expenses, you can minimize your tax liability. For example, deferring income to the next fiscal year or accelerating expenses into the current year can help reduce taxable income and save you money.
3. Audit Preparation
A well-timed fiscal year-end makes audits easier. Keeping your financial records organized and up-to-date reduces stress and ensures you're prepared for the audit process. It also helps your business look more credible to stakeholders and shows you're on top of your finances.
As an example, let’s take a consulting firm that ends its fiscal year on March 31. This allows them to evaluate their busiest quarter (Q1) before tax season, helping them plan for deductions and get a clearer sense of their financial health.
How Do Businesses Choose Their Fiscal Year-End?
Most businesses choose a fiscal year-end to match their accounting period to their business’s typical cycle and what’s common in that particular industry. Here are some examples:
- Retail Businesses: Often choose a fiscal year-end like January 31 to include holiday sales data. For example, a boutique might close its books after January to capture December revenue, helping with accurate tax planning.
- Agricultural Businesses: Might pick a fiscal year-end like September 30 to align with harvest seasons, ensuring expenses and income are reported together.
- Consulting Firms: May select March 31 to align with a busy first quarter, streamlining financial reporting.
- Schools: Might select a fiscal year from July 1, 2024, to June 30, 2025, aligning with tuition payments and academic terms.
Tips to choose a fiscal year
- Minimize disruption: Select a date when your business activity is typically slower, to allow for a more thorough and less stressful year-end closing process with minimal disruption to your operations.
- Get professional advice: Consult with a tax professional or accountant before making a decision. They can provide insights into the implications of different fiscal year-ends and help you navigate any necessary IRS approvals, especially if you're changing your fiscal year.
To change your fiscal year-end, you’ll need IRS approval via Form 1128, which may require explaining how the change benefits your business.
What Taxes Do Small Businesses in the U.S. Need to File?
Small businesses in the U.S. have to pay different kinds of taxes, depending on how the business is set up (like a sole proprietorship, LLC, or corporation) and what they do.
Key concepts you need to know:
Income tax
This tax applies to your business's profits.
Sole Proprietors & Single-Member LLCs: Report income and expenses on Schedule C attached to your personal tax return (Form 1040).
Partnerships & Multi-Member LLCs: File Form 1065 and issue Schedule K-1 to partners.
Corporations: File Form 1120 (C-Corp) or Form 1120-S (S-Corp).
Who pays it? All businesses are subject to income tax, but filing methods vary by structure.
Payroll Taxes
If you hire employees, you have to take money out of their paychecks for federal income tax, Social Security, and Medicare. You also pay a share of Social Security and Medicare taxes as the employer.
Use Form 941 to report these taxes quarterly to the IRS.
Who pays it? Any business with employees.
Sales Tax
If you sell taxable goods or services, you must collect and remit sales tax to your state. Each state has its own rules, and filing frequency depends on your sales volume.
Estimated Quarterly Taxes
Small business owners in the U.S., including sole proprietors, freelancers, partners, S corporation shareholders, and corporations, are generally required to make estimated tax payments if they expect to owe $1,000 or more in tax after subtracting withholding and refundable credits.
Corporations must make estimated tax payments if they expect to owe $500 or more. These payments cover income tax, self-employment tax, and other taxes. The IRS provides Form 1040-ES for individuals and Form 1120 for corporations to calculate and pay estimated taxes quarterly.
Due dates typically fall on April 15, June 15, September 15 of the current year, and January 15 of the following year.
Annual Tax Return
This is the final report you file once a year to sum up all your business income, expenses, and taxes you owe or already paid. Most filers submit their tax return to the IRS in April for the prior tax year.
Who files it? Every business, but the form depends on your business type.
As a small business, depending on your business type and amount of taxes owed, you may pay estimated quarterly taxes during the year to cover your income tax and self-employment tax as you earn money.
Then, you file an annual tax return to report your total income, calculate the exact tax you owe, and see if you paid too much or too little with your quarterly payments.
Business Tax Return Deadlines in 2025
To avoid penalties and stay compliant, you need to be on top of relevant tax filing deadlines for your business. Business taxes may be filed using a calendar year or a fiscal year. The deadlines for taxes filed also differ depending on relevant business structure.
Calendar Year-End Deadlines
- March 17, 2025: S corporations, multimember LLCs, and partnerships file their annual tax returns covering the 2024 calendar year.
- April 15, 2025: Sole proprietors and C corporations file their annual tax returns covering the 2024 calendar year.
- June 15, 2025: Estimated tax for the second quarter of 2025 is due.
- September 15, 2025: Estimated tax for the third quarter of 2025 is due. It’s also the deadline for extended partnership and S-corporation returns.
- October 15, 2025: Extension deadline for C-corporation returns.
- January 15, 2026: Estimated tax for the fourth quarter of 2025 is due.
- January 31, 2026: Employers must provide employees with Form W-2 copies and file Form W-3 along with Copy A of all W-2s. This is also the deadline to file Form 1099-NEC with the IRS to report non-employee compensation.
- March 15, 2026: S corporations, multimember LLCs and partnerships file their annual tax return covering the 2025 calendar year, using Form 1040.
- April 15, 2026: Sole proprietors and C corporations file their annual tax return covering the 2025 calendar year.
Fiscal Year-End Deadlines
If relevant to your business, the due dates for estimated quarterly taxes are still quarterly, but they shift to match your fiscal year. Payments are due 2.5 months after the end of each fiscal quarter.
You can request a six-month extension on time to file using Form 7004, but you must still pay any estimated taxes owed by the original deadline to avoid penalties.
Differences Between Federal, State, and Local Tax Deadlines
Tax deadlines vary by jurisdiction, so don’t assume they align:
- Federal: The IRS sets due dates, like April 15, 2025, for calendar year-end businesses.
- State: Many states align their income tax filing deadlines with the federal schedule, though this is not universal. For example, in California, partnerships and LLCs must file by the 15th day of the third month after the close of the tax year, with extensions available. Sales tax filing frequencies (monthly, quarterly, or annually) and deadlines also vary by state and locality. It’s important to check your state’s tax authority website for specifics.
- Local: Some municipalities impose local business taxes deadlines that are unique. For example, cities like San Francisco may require additional filings for gross receipts taxes.
💡Tip: Use a calendar tool like Google Calendar to track federal, state, and local deadlines, and set reminders a month in advance.
Year-End Actions for Small Business Owners
Preparing for year-end can feel overwhelming, but breaking it down into steps makes it manageable. Here’s how to get ready.
Pre-Tax Season Checklist
- Reconcile Financial Statements: Compare your bank accounts, credit cards, and bookkeeping records to ensure accuracy. Tools like QuickBooks can automate this process, saving hours.
- Review Expenses: Identify deductible expenses like office supplies, business meals, or travel to reduce taxable income. For example, a freelancer might deduct a new laptop purchased for work.
- Inventory Check: Conduct a physical inventory count to match your records, especially for retail or product-based businesses. Discrepancies could affect your tax reporting.
Fiscal Year-End Checklist
- Maximize Deductions: Prepay expenses like rent or subscriptions before year-end to claim them in the current tax year. For example, a small bakery might prepay January’s rent in December to boost deductions.
- Review Credits: Check eligibility for tax credits like the Research and Development (R&D) Credit or Employee Retention Credit. A tech startup might qualify for R&D credits for developing new software.
- Defer Income: If possible, delay invoicing clients until after your fiscal year-end to push taxable income into the next year, lowering your current tax liability.
Consequences of Missing the Fiscal Year-End Cutoff
Missing tax deadlines can hit your business in the following ways:
- Late Filing Penalties: The IRS charges a 5% penalty per month (up to 25%) for late filing, plus a separate penalty for late payment.
- Interest Charges: Unpaid taxes accrue interest, currently around 8% annually, compounding daily.
- Missed Deductions: Failing to file on time may cause you to miss deductions or credits, increasing your tax bill.
For example, imagine a small retail business missed its April 15, 2025, deadline and didn’t request an extension. It faced a 5% penalty on its $10,000 tax bill ($500/month) and accrued interest, costing an extra $1,200 over three months when taking penalty and interest into account. Filing Form 7004 could have avoided the penalty.
How Playroll Simplifies Payroll in One Place
Managing payroll taxes can be a headache, especially when operating across multiple jurisdictions. By using a global payroll management platform like Playroll, you can gain an overview of payment obligations in one place and can get your business audit-ready to reduce errors and ensure compliance with federal, state, and local tax rules.
Book a chat with our team to learn how to simplify your payroll operations.
ABOUT THE AUTHOR
Marcelle van Niekerk
Marcelle is a skilled Content Manager at Playroll, a leading global HR platform. With a passion for storytelling and a keen eye for trends, Marcelle specializes in crafting insightful content about remote work, global employment, and the evolving dynamics of the modern workforce.
Business Tax Deadline FAQs
What’s the difference between the fiscal year and financial year?
They’re often used interchangeably, referring to the 12-month period used for accounting and tax purposes, which may or may not align with the calendar year.
What happens if you change your fiscal year-end?
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You’ll need IRS approval via Form 1128, and you may need to file a short-year return for the transition period. Consult a tax professional to navigate this process.
How do you file business tax returns?
Use the right IRS form for your business type: Form 1040 (Schedule C) for sole proprietors, Form 1065 for partnerships, Form 1120S for S corporations, or Form 1120 for C corporations. E-filing through software like TurboTax or with an accountant is recommended for accuracy.
What are the types of business taxes?
Businesses may face income tax, self-employment tax (for sole proprietors), payroll tax, and excise tax (e.g., for specific goods like fuel). Check with your state for additional taxes like sales or franchise taxes.
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