Tax Guru – Ker$tetter Letter

Q:

Subject: Blog: Fiscal Year End

Hello TaxGuru,  

Love your blog. Read your article on Choosing a Fiscal Year (posted Jan. 2010), and was hoping you could answer a question for me. I started a business in March 2011, incorporated in Delaware, and operate as a foreign stock corporation in California. On the EIN, I (predictably) chose December 31st as the end of my fiscal year. Your blog suggests June 30 as the ideal corporate year-end date. Aside from the 1128 form you listed, is there anything else I would need to do to make this change? (i.e, amend articles of incorporation? File anything with Delaware and California?). Would really appreciate your advice.  

Respectfully,

  Aspiring 25 year old entrepreneur  

A:

You should be working with a professional tax advisor; especially one who is experienced with multi-state corporate taxation.  It is very easy to screw things up and get into big trouble with the FTB.

As I have said in multiple articles, the fiscal year for a brand new C corp is not officially established with IRS until you file the first 1120 with them, regardless of what you may have entered on the SS-4. You don’t need to send them anything other than your first 1120, or the extension (7004), for the FYE 6/30/11 by 9/15/11.

Good luck.

Kerry Kerstetter

Follow-Up:

Thank you Kerry. Much appreciated!