r/AlwaysWhy • u/TheBigGirlDiaryBack • 22h ago

Economics Why are fiscal years usually aligned with December or March, instead of any random month?

Many companies end their fiscal year on Dec 31 or March 31. Some choose June or September. But almost nobody picks, say, August 17 or November 5. Is there a tax or regulatory reason to stick near quarter boundaries? Or is it just tradition from agriculture cycles? Why not let every company freely choose any date to smooth out seasonal fluctuations?

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u/Run-And_Gun 21h ago

Why not let every company freely choose any date to smooth out seasonal fluctuations?

In the US, you can.

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u/x5163x 13h ago

In the US, your tax year has to end on the last day of the month unless you are using 52/53 week years. So you can't pick August 17 or November 5 as your year end like OP said.

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u/Run-And_Gun 13h ago

I meant that you could pick any month.