What reason should I check to indicate a short tax period?
836 views | Last modified 3/10/2023 1:11:17 AM EST

Applicable To
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If you are confused about what reason you should check to indicate a short tax period, here are some examples given for you to decide from different options: 

  1. Initial Return 

If you are XYZ Corporation formed on July 1 and chose the calendar year as your tax year, your corporation’s first tax return will cover the short period from July 1 through December 31. To indicate it to the IRS, you are required to check the initial return box from the given options.

2. Final Return

If you are a calendar year corporation and terminated your business on August 15, your corporation’s final return will cover the short tax period from January 1 through August 15. To indicate this to the IRS, you can check the final return box from the given options. 

3. Change in Accounting period

If your company’s financial year generally runs for the time period of January 1 to December 31st (Calendar year) and now you decided to change the financial year to more or less than 12 months of your choice, then you need to check the change in accounting period box from the given options. 

Please note, if the box for "Change in accounting period" is checked, you must have received approval from the IRS to change your tax year unless certain conditions have been met. For more information, see Form 1128 and Pub. 538, Accounting Periods and Methods.

4. Consolidated Return

Check this box if your organization is a corporation, common parent of a group, or agent of a consolidated group that intends to file a consolidated return. 

A consolidated tax return is a corporate income tax return for an affiliated group of corporations who elect to report their taxes jointly on one return. Generally, all members of a consolidated group must use the same taxable year as the common parent corporation. 
5. Other Reason

Check the box if there is any other reason for the short tax year. 

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