How to review your annual report: 3 simple life hacks for US accountants
Every accountant's head hurts especially when the annual report is due! Time flies, papers get lost, and clients seem to disappear more often.
We'll try to help you out with 3 simple life hacks that will ensure your report is correct before submitting it to the tax service.
Life hack 1: Double-check
The first and most important life hack is to always double-check your work. For example, make sure you've correctly accounted for all tax deductions: expenses for office equipment, travel, and other business expenses. Minor errors can lead to major problems in the future.
Let's say you forgot to account for a $1000 expense for a new office computer. Your corporate tax rate is 21%. If you don't account for this expense as a tax deduction, you'll have to pay 21% more in taxes, which is $210. You'd probably like to save that money for other business needs. That's why double-checking is so important - it helps avoid such misunderstandings.
Hack: Use AI solutions that can swiftly verify the accuracy of your calculations. For instance, we at Octopus AI have trained our algorithm to calculate any financial metric within seconds and break down these calculations, allowing you to easily identify where a possible error may have occurred.
Life hack 2: Stay updated with tax changes
Tax laws often change, especially in the US. Subscribe to the IRS newsletter or read specialized websites to stay updated with all the latest changes that could affect your annual report.
Take for example a change in 2020 - a new rule was introduced that allows for home office expenses to be deducted if you're working remotely due to the COVID-19 pandemic. Let's say you spent $2000 on home office equipment (desk, chair, computer, etc.) and $500 on additional operating costs such as internet and electricity related to your work from home. Your total home office expenses are $2500, it is a lot!
Take for example a change in 2020 - a new rule was introduced that allows for home office expenses to be deducted if you're working remotely due to the COVID-19 pandemic. Let's say you spent $2000 on home office equipment (desk, chair, computer, etc.) and $500 on additional operating costs such as internet and electricity related to your work from home. Your total home office expenses are $2500, it is a lot!
Life hack 3: Prepare on time
It's important to know the key tax report submission dates in the US.
The regular deadline for submitting a corporate tax report is April 15, but you can apply for an extension until October 15. Start preparing at least a month before the deadline, which is around mid-March.
The regular deadline for submitting a corporate tax report is April 15, but you can apply for an extension until October 15. Start preparing at least a month before the deadline, which is around mid-March.
Use apps for task decomposition and reminders: Use apps like Trello or Asana to break down the report preparation into individual tasks and set deadlines for them. Also, use the reminder function to not miss important deadlines.
The annual report will be over in a month, but your emotional health will stay with you forever!
So don't forget about the need for rest and sleep, and use modern technologies that can make your work easier.
For example, we at Octopus AI have made a feature that will help you check the correctness of indicators in the report without the need to use paper, calculator, and complicated tables.
Here's what you need to do:
Here's what you need to do:
- Register on Octopus AI for free.
- Connect it to the accounting program you use (Xero and QuickBooks available)
- Then select the organization for which the report is being prepared, and ask Octopus to recalculate the indicator you need for a certain period. For example, you can ask: "calculate the amount of my total expenses for the last year".
- After that, compare the obtained result with the data in your report. This will help ensure the correctness of all calculations.
