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.
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For example, with Ownr, we allow you to choose your fiscal year-end when first setting up your company. This means that all of your company formation documents will properly reflect the date you choose for your fiscal year-end:
What date is most common?
Most entrepreneurs choose one of two dates:
Some entrepreneurs prefer having their business tax year the same as the calendar year. In that instance, they will choose the last day of December.
Last day of the month clo