The last month of fiscal year LLC owners usually enter is December when the business follows a calendar tax year. If the LLC has a permitted non-calendar tax year, enter the month in which that tax year ends.
Key Takeaways
- Enter December as the closing month of the accounting year for an LLC using a January 1 through December 31 tax year.
- An LLC with a permitted fiscal year enters its actual ending month, such as June for a June 30 year-end.
- An LLC's federal tax classification determines which tax years are available.
- Partnerships and S corporations generally must use a required tax year unless an exception or valid election applies.
- Form 8716 makes a Section 444 election. It is not the general form for every tax-year adoption or change.
- A federal fiscal year-end does not set state annual report, renewal, or state tax deadlines.
Last Month of Fiscal Year LLC Owners Enter for an EIN
The IRS EIN application asks for the closing month of the applicant's accounting year. For a calendar-year LLC, the answer is December. The company's books close on December 31, so December is both the last month of the fiscal or tax year and the closing month of the accounting year.
If the LLC properly uses a fiscal year ending June 30, enter June. The field asks for a month, not the complete fiscal tax year end date. Do not enter the month when you formed the LLC, received revenue, opened a bank account, or submitted the EIN application unless that month is also the end of the accounting year.
The answer should reflect the tax year the business is legally permitted to use. Entering a preferred month on an EIN application does not by itself authorize a partnership or S corporation to adopt that year. Check the LLC's federal tax classification, ownership, and any applicable election before selecting a non-calendar closing month.
The IRS provides current EIN application information. Review those instructions if the LLC has a 52-53-week year, a foreign owner, an organizational change, or an uncertain federal classification. Your accounting records, EIN application, and federal returns should use consistent tax-year information.
Difference Between a Tax Year, Fiscal Year, and Closing Month
A tax year is the annual accounting period used to keep records and report income and expenses. A calendar tax year runs from January 1 through December 31. A fiscal tax year generally ends on the last day of a month other than December, although an eligible taxpayer may use a qualifying 52-53-week tax year.
The fiscal year-end date is the exact date the period closes. The last month of fiscal year is only the month containing that date. For example, an LLC with a June 30 fiscal tax year end date has June as its closing month of accounting year. An LLC closing on December 31 has December as its closing month.
| Tax-Year Format | Example | Closing Month | Exact Year-End |
|---|---|---|---|
| Calendar year | January through December | December | December 31 |
| Conventional fiscal year | July through June | June | June 30 |
| 52-53-week tax year | Ends on a selected weekday under an IRS-permitted method | Depends on the adopted method | Varies from year to year |
A 52-53-week year ends on the same day of the week. It may end on the last occurrence of that weekday in a month or on the occurrence nearest the last day of a month. This keeps weekly operating periods intact, but the precise date can change each year. Consult the IRS tax-year guidance before using this method.
LLC Fiscal Year Options by Federal Tax Classification
An LLC is formed under state law, but federal tax rules determine its tax year. A domestic single-member LLC is generally disregarded for federal income tax purposes unless it elects corporate treatment. A domestic LLC with at least two members is generally taxed as a partnership unless it elects to be taxed as a corporation.
| Federal Treatment | Usual Tax Year | Non-Calendar Year Availability |
|---|---|---|
| Single-member disregarded LLC | Generally follows the owner's tax year | The LLC does not independently select a different income tax year from its owner |
| LLC taxed as a partnership | Its required year, often the calendar year when individual members use calendar years | May be available under the partnership tax-year hierarchy, an established business purpose, or a qualifying Section 444 election |
| LLC taxed as an S corporation | Generally the calendar year | May use another permitted year if it meets an applicable exception, establishes a business purpose, or makes a qualifying Section 444 election |
| LLC taxed as a C corporation | Calendar or qualifying fiscal year | Generally has greater flexibility when adopting its initial tax year, subject to applicable corporate tax rules |
A partnership's required tax year can depend on its partners' tax years and ownership interests. Therefore, a multi-member LLC does not automatically receive a June or September year-end merely because that period better matches its operations. S corporations also face restrictions designed to limit the deferral of income passed through to shareholders.
A C corporation generally adopts a tax year by filing its first federal income tax return using that year. Special rules can apply to certain corporations, and changing an established year is a separate question. If you are still deciding between partnership and corporate taxation, review how an LLC's federal classification affects its tax form.
How to Choose an LLC Fiscal Year End
Start with legal eligibility, then consider business preference. Seasonality, budgeting, inventory cycles, and the timing of major contracts may make a non-calendar fiscal year useful, but those factors do not automatically override a required tax year.
- Administrative simplicity: A December year-end often aligns a pass-through LLC's records with calendar-year individual owners.
- Seasonality: Closing shortly after a peak season may provide a more useful view of a complete operating cycle.
- Reporting relationships: A subsidiary may benefit from aligning its reports with a parent company, although tax rules still control whether that year is available.
- Accounting workload: A non-calendar year can move year-end work outside the busiest calendar-year reporting period.
- Weekly operations: Retail, hospitality, and similar businesses may find a 52-53-week year useful for comparing equal weekly periods.
Consider the owners as well as the business. A fiscal year can affect when pass-through income reaches an owner's return, which is why partnership and S corporation rules restrict tax-year choices. Also distinguish state formation decisions from federal tax-year decisions. For example, forming a company in Delaware does not itself create a special federal year-end, although a Delaware LLC's fiscal-year planning may involve separate state compliance questions.
Document why the proposed year fits the company's operations. Before configuring accounting software or giving a closing month to a bank or payroll provider, confirm that the year is available under the LLC's federal classification.
Adopting or Changing an LLC Tax Year
A new business generally adopts its tax year when it files its first federal income tax return. However, the selected year must be permitted for the entity's federal classification. Filing an extension, applying for an EIN, or recording a preferred month in company records does not independently establish an otherwise unavailable tax year.
An established LLC may need IRS consent to change its tax year. Form 1128 is the application to adopt, change, or retain a tax year when that procedure applies. Some changes may qualify for an automatic approval procedure, while others require the taxpayer to establish a business purpose and obtain advance consent. The correct approach depends on the entity's classification, current year, requested year, and tax history.
Form 8716 serves a narrower purpose. A partnership, S corporation, or personal service corporation may use it to make a Section 444 election for a tax year other than its required year if the entity satisfies the election's conditions. Limits on the permitted deferral period and continuing compliance requirements apply. Review the official Form 8716 information rather than treating the form as general permission to choose any closing month.
If your LLC wants a non-calendar year, needs to change an established year, or has owners and elections that make the permitted year unclear, you can post your legal need on UpCounsel's marketplace. A tax attorney can review the LLC's classification and ownership, identify the available IRS procedure, and prepare or review the election or approval request with your tax professional. Responses typically arrive within a day.
Do not begin using a new year solely because it improves internal reporting. Keep the existing tax year until the applicable election, automatic procedure, or IRS approval requirements have been satisfied.
What the Fiscal Tax Year End Date Does and Does Not Control
The LLC fiscal year end controls the period covered by its federal books and annual income tax return. It affects when the company closes its accounts, measures annual results, prepares owner information, and determines the return period. The precise filing deadline depends on the LLC's federal tax classification and the month in which its tax year ends.
The closing month does not necessarily control every payment or filing. Payroll tax deposits and returns follow their own schedules. Owners may have estimated-tax obligations based on their individual circumstances. Sales taxes, excise taxes, information returns, and other obligations also can operate on monthly, quarterly, annual, or transaction-based schedules.
For federal income tax return timing, see the separate discussion of when an LLC tax return is due. A fiscal-year selection can move the annual return period, but it does not eliminate required filings.
State annual reports, franchise taxes, renewals, and state income tax returns are also separate from the federal accounting year. Check each state's current instructions instead of assuming that a June federal year-end moves every state deadline to June. California businesses can review the distinct California LLC filing rules, while Georgia businesses can check Georgia LLC tax filing information. Entity maintenance is another issue, addressed in the guide to annual LLC renewals.
Frequently Asked Questions
How Many Years Can an LLC Show a Loss?
There is no single federal rule limiting an LLC to a fixed number of loss years. The result depends on its tax classification, the owners' basis, at-risk and passive-activity limitations, and whether the activity is genuinely operated for profit. Repeated losses can attract scrutiny, so retain records showing revenue efforts, business changes, and a credible profit objective.
Does an LLC Have to File a Tax Return?
An LLC may have to file a federal return, but the required return depends on its tax classification. A disregarded LLC's activity generally appears on its owner's return, while an LLC taxed as a partnership or corporation may have an entity-level filing obligation. Employment, information, excise, and state returns may also apply independently.
Do You Have to File Taxes for an LLC With No Income?
No income does not automatically eliminate every filing requirement. A partnership with no income and no deductible or credit-related expenditures may receive different federal treatment from a corporation, which generally has its own return obligation. Expenses, payroll, elections, prior activity, and state rules can also create filing duties despite having no sales or revenue.
How Do LLC Owners Calculate Quarterly Taxes?
LLC owners generally estimate their expected annual individual tax, subtract anticipated withholding and credits, and make estimated payments under the applicable IRS method. Pass-through income, self-employment tax, other household income, and prior-year tax can affect the calculation. An annualized-income method may help when earnings are seasonal. An LLC taxed as a corporation follows separate corporate rules.
How Long Is a Fiscal Year?
A conventional fiscal year lasts 12 consecutive months and ends on the last day of a month other than December. A qualifying 52-53-week year instead ends on a consistent weekday and contains either 52 or 53 weeks. A short tax year can occur when a business begins, terminates, or changes its annual accounting period.
How Often Does an LLC File Taxes?
An LLC generally files its federal income tax return annually, but other filings and payments may occur more often. Estimated taxes, payroll taxes, sales taxes, and information returns follow separate rules. Filing frequency also depends on whether the LLC is disregarded or taxed as a partnership, S corporation, or C corporation, plus applicable state and local requirements.
