Q:

Kerry,

I wanted to thank you for your article about the differences between the S-Corp and C-Corps. I ended up filing my new business as a C-Corp because of your article. The IRS made my fiscal year December 31 and I need to change it. I haven't filed a 1120 yet. My question is what is the best month to end a fiscal year?

I wish you were out here in Colorado. I need to find a CPA as knowledgeable as you. Have you thought about teaching other CPA's your knowledge and then endorsing them on your web site? Just a suggestion.

I appreciate all your help,

A:

I hope you've checked out my info on choosing a fiscal year:
http://www.taxguru.org/corps/taxyear.htm

You are correct that, regardless of what year-end IRS has assumed you are using, or even what you may have entered on the SS-4 when you applied for the corp's FEIN, nothing is set in stone.  Until you file your first 1120, you can change the year-end. 

While there is no universal best month to use as the year-end, I have found that June 30 usually works out better than other months because it allows the most time on either side (six months) to shift income & expenses between the 1120 and calendar year tax entities (1041, 1065 & 1120S).

It has long been a dream of mine to have a network of independent like-minded tax professionals around the country to whom we could refer people.  Perhaps with the growing popularity of this and other similar blogs and websites, we will be able to do that someday.

Good luck.

Kerry Kerstetter

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 12/08/2004 06:48:00 PM Send this post: