Cents For Sense Blog | Common Tax Myths You Should Ignore | Talkmarkets

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Common Tax Myths You Should Ignore

Date: Wednesday, January 15, 2020 9:49 PM EDT

It is that time of the year again, the tax season, filled with a lot of myths and confusion. You will hear a lot of conflicting information from family, friends and colleagues about what is and what isn’t, when filing your tax returns. There is a lot of confusion and misinformation about requirements, deductions and loopholes, among others. Some of these may cost you a good amount of money.

Here are 7 tax myths that you should ignore:

1. Filing taxes is voluntary

This is the most blatant falsehood on this list. Several people who believe that filing taxes is voluntary normally base their argument on the fact that form 1040 describes the US tax system is voluntary. They are wrong. Voluntary, in this case, means every individual is responsible for determining the correct amount of tax they should pay.

2. Everyone with an income should file their returns

Several people assume that everybody with an income is required to file a tax return. Well, this is not true. Not everybody who earns an income is required to file a tax return. People who earn under a set amount of income per year are not required to file tax returns. However, even if you are not technically required to file returns, it is good to file and see if you are eligible for tax refunds or credits. Alternatively,  if you end up owing and are looking for ways to pay, see if car title loans could be the solution. 

3. Students don’t have to pay taxes

Although not all students are required to pay taxes, students who make more than $12,000 per year do. And it does not matter whether you are a part-time or full-time student. However, if you earn more than $12,000 per year but your parents list you as a dependent, you can be exempted from paying taxes if you meet certain conditions.

4. Your accountant is to blame for mistakes in filed returns

The truth is that the buck stops with you. In case your tax preparer makes a mistake, you are the one in trouble. A good tax preparer should know what they are doing. However, to prevent a financial disaster at the hands of your tax preparer, make sure you double-check their work. Also, ensure you hire a good tax preparer. Check out https://taxfyle.com/tax-preparation-services for expert tax preparers.

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Leslie Miriam 1 year ago Member's comment

I think all of these are pretty well known, but number 6 totally through me for a loop. That's news to me! Seriously though, if you report illegal activity on your taxes, won't they report you to the authorities?