Selecting a C corporation’s tax year

Description

Abstract: Businesses that operate as C corporations have substantial flexibility when selecting a tax year. However, businesses that operate as partnerships or S corporations are restricted by law in their choice of a tax year. Once selected, a tax year generally must be maintained until the business is required or elects (with IRS permission, if necessary) to change it. This article discusses the two types of tax years and the considerations involved in choosing one.