Tax Quarters

Paying of of a year's income tax is preferably done in quarters, though it may be done in a single payment. There are two (2) kinds of taxable years: Calendar and Fiscal. A calendar year is the year we are all familiar with. It starts from January 1 and ends on December 31. A fiscal year has a different date for starting and beginning.

Corporations are required to file their income tax returns on a quarterly basis. If the corporation chooses the Calendar Year, it must file its Quarterly Income Tax Returns in the following order:

1st return: on or before May 30

2nd return: on or before August 29

3rd return: on or before November 29

Final Adjustment Return: on or before April 15 of the next year.

If the corporation chooses the fiscal year, another date is set for the beginning of the first quarter. For fiscal years, the rule is that the 1st, 2nd and 3rd quarterly income tax returns are filed within 60 days from the end of the quarter. The Final Adjustment Return is filed on the 15th day of the 4th month after the end of the taxable year.

Remember that a quarter is three (3) months. Therefore, after the quarter ends the corporation has 60 days to pay its income tax for that particular quarter. Therefore if a corporation, for example, chooses February 1 as the beginning of its fiscal year it must file its returns on the following dates:

June 29 -1st return

September 29 -2nd return

December 30 -3rd return

May 15 -Final Adjustment Return

The incomes and expenses in each return are computed on a cumulative basis from the first to the final return for corporate income taxes. All income and expenses for the taxable year must be included in the Final Adjustment Return. If there is an excess of payment for a quarter, the taxpayer will not pay any tax for that quarter. If there is an excess in the Final Adjustment Return, however, the taxpayer can either have the excess refunded to him or credited to his taxes for the next succeeding quarter. This must be indicated in the tax return.

The Final Adjustment Return is crucial. It is where the necessary adjustments for the taxpayer's income taxes are made (which is why it's called "adjustment.")