How to Choose a Fiscal Year-End for My Business?
Choosing a fiscal year-end is one of the first questions entrepreneurs are asked when incorporating their business. But what date should you choose for your business?
What is a fiscal year-end?
Your business’s fiscal year-end is also known as the tax year-end or financial year of your business.
The fiscal year-end is generally a twelve month period, however, this period may be shorter for businesses in their first year.
How do I choose my fiscal year-end?
The fiscal year-end for your business can be any date within 53 weeks from your incorporation date. The fiscal year-end will be officially set once you file your first T2 corporate tax return. The T2 tax return must be filed within 3 months after your business’s fiscal year-end date to avoid interest.
Although your fiscal year-end is officially set when you file your first tax return, it is best practice to set your fiscal year-end when you initially incorporate your business. This is because the initial directors’ resolution will specifically reference the business’s fiscal year-end.