Tax Year.

In plain English

A tax year is the span of time the IRS uses to add up your income, deductions, and credits for one tax return. For nearly every individual it runs from January 1 to December 31, called a calendar year. A business can sometimes use a fiscal year, a 12-month period ending on the last day of a month other than December. The return you file in spring covers the prior tax year, so a return filed in 2026 reports your 2025 income.

01Why it matters

Knowing which year a dollar of income or a deduction lands in decides which return it belongs on, and timing a payment a few days earlier or later can move it into a different tax year entirely.

02The math, step by step

You get paid on December 31, 2025. Even if the money does not hit your bank until January 2, 2026, the IRS counts it as 2025 income because you had the right to it in the 2025 tax year, so it goes on the return you file in early 2026.

03What this is NOT

04Receipts

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