State EIN Number Application
June 29th, 2010
Question: Calendar year vs. fiscal year, what is the difference.?
I am filing for an EIN – Employer Idenitification Number and the application asksif I am on a fiscal or calendar year. What is the difference of filing for either type of calendar for tax purposes? Is one better than the other? By the way I am a registered LLC company in the state of California.
Thank you.
Answer: The only difference between a fiscal calendar, and a calendar year is in how you do accounting.
For Example if you use the Fiscal calendar, your accounting year could start in October, or the fourth quarter of the calendar year. Or, in any other quarter and it doesn’t matter. While this would be your 1st quarter it is still the 2nd, 3rd, or 4th quarter of the calendar year. This really only matters for businesses that already have an established accounting policy based on the fiscal year.
If you are just starting the business save yourself some headaches and just use the calendar year. It makes taxes and accounting easier. A lot easier. I have started multiple corporations in my life and it has always been easier to just use the calendar year.
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