Sole proprietorships must use the same tax year as the proprietor of the business.

Question

Quizplus · Accepted Answer

Sole proprietors are not required to use a calendar year for tax purposes. However, they must use a consistent accounting period, which can be a fiscal year (ending on the last day of any month other than December) or a calendar year. The chosen accounting period must be used consistently from year to year unless permission is obtained from the IRS to change it.

Sole Proprietorships Must Use the Same Tax Year as the Proprietor