Many myths fly around come tax season, making big claims that you don't have to do this, or don't worry about that. But how do you know which are true, and which to avoid? Well, the best way to not come victim to believing a myth that might sound too good to be true about filing taxes is to contact the IRS directly.
For any individual, Mon-Fri they are open and able to discuss all things tax related by calling 1-800-829-1040. Or go to their website at www.irs.gov
. It's an excellent resource to get most any question answered, and most any myth debunked.
For a quick cheat sheet list though, here are the top 5 myths I hear about all the time when it comes to filing taxes, that just are simply not true.1. Filing is Voluntary
This one might sound silly to most of you, but this myth is the biggest lie floating around, that gets repeated each and every year about filing your taxes. And there really isn't much to say about it, other than its simply untrue. Filing your taxes is not a voluntary affair. However, it's not 100% necessary for every single person out there, just most. That doesn't mean that the myth has any merit though. The idea that filing is voluntary assumes that you have a choice, like it's an option. Not true. But there are some that won't be required, due to not making the minimum required income throughout the year, or some other exemption reason. If you believe that you might legitimately not be required to file, the best way to know for sure is to use the official IRS interview tool found here:Do I Need to File a Tax Return?2. If you're unemployed, you don't have to pay any taxes
This myth sort of goes in conjunction with #1. And is also untrue, while albeit there are some notable exemptions. The implication with this myth is that if you are unemployed but received unemployment that you don't have to file that money because you didn't earn it as ordinary income. Truth is, the government still considers unemployment money as earned income, with a W2 and everything. You still have to file that. For the official IRS breakdown on this, visit:Unemployment Compensation3. All gifts can be counted as charitable donations
Perhaps the most common myth that gets repeated every year is the idea that giving any gift can somehow be written off as a charitable deduction on your taxes, come filing time. Again, this is not the case. Unless you are giving to a qualified exempt institution, a charity organization that is officially recognized as such, you unfortunately won't be able to file any gifts or charitable donations that you gave away during the year. Of course, if you did give to a charity that you feel warrants a deduction, use the official IRS website's checklist to see how to go about writing off your generous givings here:Eight Tips for Deducting Charitable Contributions4. My tax accountant is liable for any mistakes made
Of all of the dangerous tax filing myths out there, this one might be the worst. Hiring a tax lawyer, or attorney, or consultant, or accountant.. whatever the label, please understand and know that liability does not shift to them just because they are the ones that prepare your documents for you. As far as the state and government are concerned, you are still the one providing all the necessary information to file, and you are also the one responsible for okaying the paperwork to be filed and sent, on your behalf. The responsibility ultimately falls upon you and you alone, if there are any errors or falsities.
Be sure and double check any work that a consultant or accountant does on your behalf. One good thing of note here though is that most tax consultants will help you, if you are ever audited or have issues with what you filed after the fact. But again, the responsibility is squarely on you at the end of the day. A close second to this myth is that all CPA's are tax experts. Once again, this is not always the case.5. Students don't have to pay taxes
This myth does also fall under the umbrella of #1. Although, just like with #2 myth, the implication is different. Here, this myth promotes the idea that if you are a student, no matter what income you make or don't make, no matter what benefits you receive or do not, that you don't have to file taxes at all, simply because of your student status.
While part of me wishes this were true to avoid having to grow up and pay taxes just that much longer, unfortunately this falls under the top 5 of tax myths that need debunking. Regardless of your student status, if you make enough income to file a return, you are still lawfully required to do so.