What Is Fiscal Year 2025 and When Does It Start?

A fiscal year is a 12-month financial reporting period used by organizations for accounting and budgeting. It is distinct from a standard calendar year, which runs from January 1 to December 31. This period is important for understanding an entity’s financial health and performance.

Defining the Fiscal Year

A fiscal year is a consecutive 12-month period an organization uses for financial accounting, budgeting, and reporting. It does not necessarily coincide with the January-December calendar year. This distinction allows entities to align their financial cycles with operational realities or industry patterns. For example, a business reliant on holiday sales might choose a fiscal year ending in January to include all revenue in one reporting period.

The naming convention for a fiscal year typically refers to the calendar year in which the fiscal period ends. “Fiscal Year 2025” (FY2025 or FY25) refers to a 12-month fiscal period that concludes within calendar year 2025. This means a fiscal year labeled FY2025 could have begun in 2024 and extends into 2025, or it could begin and end entirely within 2025, depending on the chosen end date.

Diverse Fiscal Year Calendars

Entities adopt varied fiscal year-end dates based on operational needs, industry cycles, or legal requirements. This flexibility allows organizations to better reflect financial performance by aligning reporting with natural business rhythms.

The United States federal government operates on a fiscal year from October 1 to September 30 of the following calendar year. For instance, Fiscal Year 2025 for the US federal government began on October 1, 2024, and concludes on September 30, 2025. State and local governments often have different fiscal year calendars, with many using a July 1 to June 30 period. Some may use October 1 to September 30, or April 1 to March 31, depending on their needs and state regulations.

Corporations also exhibit diversity in their fiscal year choices. Many businesses align their fiscal year with the calendar year (January 1 to December 31), while others select different dates to coincide with business cycles or inventory management. For example, some retail businesses choose a fiscal year ending on January 31 to capture the full holiday shopping season in their financial reports. Other common fiscal year-ends include March 31, June 30, or September 30.

Significance of Fiscal Reporting

Fiscal years are important for effective financial management and transparency across organizations. They provide a consistent 12-month framework for budgeting and planning, allowing entities to set financial goals and strategically allocate resources. This structured approach enables better control over spending and helps achieve revenue targets.

Financial reporting, based on fiscal periods, involves preparing statements that measure performance, such as revenue, expenses, and profits. These reports offer a clear picture of an entity’s financial position and its performance over the fiscal year. Stakeholders, including investors, citizens, and governing bodies, rely on this data to evaluate an organization’s financial health, progress, and accountability.

Fiscal years also play a role in taxation, as businesses often file tax returns based on their chosen fiscal period. While individual taxpayers typically use the calendar year for tax filings, businesses can select a fiscal year for tax purposes, which influences their tax filing deadlines. This alignment helps ensure proper income reporting and compliance with tax regulations.