5 Tax Myths About the IRS That Are False
It’s that time of year again. Tax time! You may even have already started gathering your receipts, figuring out what you’re going to be able to write off this year and what you’re not. On the other hand, some of you may have already gotten everything in order and are simply waiting for your W-9 form to arrive so you can officially file your 2021 taxes. Whatever the case may be, the fact is that there is a plethora of misinformation out there about filing your taxes, what you can and can’t write off, and other myths about the IRS that are patently false.
So, to make things easier for your tax journey, your friends at Maggi Tax want to take a moment and dive into the five most common tax myths about the IRS that are false. This way, there are no surprises come April 15th.
Myth #1: Filing Taxes Is Voluntary
This is the biggest falsehood on our list, and you’d be surprised how many people actually believe this myth to be 100% true. They say that because the Form 1040 instruction book describes the taxes as “voluntary,” it means they don’t have any legal obligation to file their taxes every year. This is a big mistake and completely untrue.
What the IRS means by the term voluntary is that you are responsible for determining the correct amount of taxes that you owe. It doesn’t even come close to meaning that filing your taxes is an actual option. It’s simply and utterly not an option. It’s the law. Not filing your taxes is a bad idea.
Myth #2: The IRS Is Obligated by Law to File a Return for You
While the IRS does have the right to verify your return but sitting around waiting for them to do the work for you is going to cost you more than the time it takes to have a tax pro like Maggi Tax handle your return. Similar to the idea that taxes are voluntary myth, this myth originates from language alluding to the fact the IRS can compile a return on your behalf if they suspect you of committing tax fraud. What’s true about this is that while they may be able to do that, it doesn’t mean at all that you’re off the hook for having to fill out and file your own tax return.
Myth #3: Home Office Deductions Means Instant Audit
One day not long ago, it used to be true that deducting a home office meant an automatic audit. But with the advent of home offices in the workplace, this former fact has become mostly fiction. Keep in mind that claiming a home office can increase scrutiny. They’ve still become common enough that you don’t have to be afraid of claiming a legit deduction.
Myth #4: Students Don’t Have to Pay Taxes
There is some truth to this IRS myth in that if you’re a student and still considered to be a dependent of someone else, that you’re not required to pay taxes if you earned less than $12,550 in 2021. However, it’s still in your best interests to file your taxes anyway, especially if you had an employer that withheld money for tax purposes. You won’t get your refund otherwise.
Myth #5: Money Made Online Is Tax-Free
This myth is entirely false. It’s not difficult to understand how a myth like this might have been started in the first place. Especially since people doing business online aren’t filling out a W-9 and having an employer reporting their income to the IRS. But the truth is, any income you’ve earned, whether online or offline, from selling a product or service that generates more than $400 in income requires you to declare that income on your tax returns.
These are five of the most common myths about the IRS that are inherently false. With the friendly tax professionals at Maggi Tax, you can be confident that your taxes are done right while adhering to the most current and up-to-date tax laws and codes. From simple to complex tax returns, no matter what your situation is, Maggi Tax has you covered. Call us today to get the expert and experienced tax guidance you deserve at (813)-850-0131.
