Today is a day to celebrate the wondrous, mystical, and never-ending number known as Pi! March 14th (3/14) marks National Pi Day with its numerically perfect date that parallels the numerical value of pi: 3.14159 – an irrational and transcendental number which means it goes on forever without repeating itself. While this famous constant has helped propel mathematics forward drastically over time, who knew it could also help keep our finances in check?
Pi Is an Excellent Reminder
Taxes are often a daunting task made of complex numbers. But Pi Day is an excellent opportunity to approach this intimidating topic uniquely! At its root, taxes are all about the mathematical calculations used for compliance with Internal Revenue Service (IRS) regulations. By rounding off pi into a whole number (3.14) we’re reminded that the IRS wants us to provide whole financial information every year. We are responsible for delivering numerical details on our tax forms – from taxable incomes earned; down to your final payable amount after any applicable deductions have been added or subtracted according to current standards. Pi day is a great time to celebrate math and a perfect chance to look at the financial picture through a different lens.
A Pie is round. Should numbers for taxes be rounded off?
The Internal Revenue Service acknowledges that filing taxes can be a complex process. They have adopted rounding numbers on tax returns to make it easier for the filers and the IRS. That said, you can round numbers to the nearest dollar, not to the nearest hundred or thousand.
The primary reason for rounding in accounting is a powerful tool for providing greater accuracy in assessing the financial position of companies. If misused, it can bring about unbalanced and unreliable figures that may mislead stakeholders. Essentially, this involves cutting down too many decimals to suit better-reporting metrics; depending on how much you lower or enhance the figure from its original value subsequently determines whether profits increase or decrease.
