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Tax Year

In short

The annual accounting period used to calculate tax on gains and losses — dates and rules vary by country.

A tax year is the fixed twelve-month period a tax authority uses to total up gains, losses, and income for a single return. Many countries use the calendar year (January to December), but others use a different twelve-month period — the exact dates, and what counts as a completed sale within them, are set by each country's own tax rules.

Which twelve-month period counts as a tax year, when it starts, and its filing deadline are all set by national tax law and differ by country — some align to the calendar year, others do not. What stays consistent across jurisdictions is the underlying mechanic: a gain or loss is generally attributed to the tax year in which the sale or other taxable event is completed, not the year the position was opened, and losses realized within a year can often offset gains realized in the same year, subject to each country's own rules on what qualifies and any limits on carrying a loss forward or back. Because the concept is jurisdiction-specific, the applicable start and end dates, rates, and deadlines depend on where an investor is tax resident, not on this platform.

Related concepts

  • Tax-Loss Harvesting — If you're up $10,000 on Apple but down $3,000 on another stock, you can sell the loser to offset $3,000 of your Apple gains. You only pay tax on $7,000 instead of $10,000. The IRS lets you use losses to cancel gains.
  • Capital Gains Tax — When you sell an investment for more than you paid, the profit is a capital gain and the government taxes it. Hold less than a year = higher rate (up to 37%). Hold more than a year = lower rate (0%, 15%, or 20%).
  • Carryforward Losses — If you lose $15,000 on investments but only have $5,000 in gains and can use $3,000 against income, you have $7,000 left over. You can 'carry forward' that $7,000 to use in future years when you have gains.