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Common Misconceptions About Taxes

Common Misconceptions About Taxes

By on Aug 19, 2016 in Tax Tips | 0 comments

Common Misconceptions About TaxesNot being fully educated on tax matters can be a costly mistake. When it comes to taxes, it’s never recommended to assume what certain regulations are.

Confirming it with the Internal Revenue Service (IRS), or an experienced tax relief firm that has the knowledge and expertise to help you understand how tax laws work is the best way to approach any uncertainties.

You’ll also be better off consulting with a tax professional who has years of practice communicating with the IRS on such matters.

Success Tax Relief, a tax relief firm located in LaPorte, Texas, has over 30 years of experience working with the IRS negotiating tax balances and affordable payments on behalf of our clients.

Throughout this time, we have come to learn what most taxpayers might incorrectly assume (to their financial detriment).

To avoid making these types of costly assumptions, we have provided a list of some of the most common misconceptions people have made about taxes:

  • Running a business at home is tax-deductible.

Not anymore, at least not for everyone. It used to be that taxpayers could write off their home business on their annual filing, but now the IRS has added more stipulations that restrict some entrepreneurs from claiming their home business. There needs to be a designated space in your home solely committed to the business and you have to be profitable.

  • Filing an extension means that you’re extending your payment deadline.

Nope. Although it’s understandable why you may think that way. The IRS is very particular with the annual filing process. There’s a filing due date and payment due date. If you are filing for an extension, be sure to see what you can do to file for a payment extension as well. This is where the expertise of a tax professional can come in quite useful because the IRS will not suggest this to you as an add on. You are fully responsible for educating yourself about tax matters, because the IRS will hold you accountable for your tax obligations.

  • I didn’t work. I’m a student so I don’t need to file taxes this year.

Not even close. If you didn’t earn a dime, the IRS still wants to know about it. Furthermore, if you’re in school, chances are you’ve received some type of financial aid and the IRS wants to know about that too! Even if someone is able to claim you as a dependent, you are still required to file. If you have any doubts about this, consult a tax expert.

  • Making more money means you pay more taxes.

Not necessarily. The IRS wants to know your gross and net pay. The gross pay is how much money you’ve received before taxes and other deductions. Your net pay is what you get after taxes and deductions. Certain deductions like healthcare savings and retirement 401K and IRAs are taken out of your check before taxes, reducing your income. So depending on how much of your income is reduced can very well keep you from reaching that higher tax bracket.

If you have questions about other tax myths, contact the tax professionals at Success Tax Relief. We have an open door policy where you can call us any time at 1-877-825-1179, or you can also reach us through our online contact form today.

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