Three Myths about Taxes

It can be difficult to understand tax language because of its complexity. The complexity of tax language often leads to misinterpretations of tax laws. Believing some of these misinterpretations can lead to mistakes on your tax return. Today we will discuss three common myths which surround taxes and provide clarification so you can avoid making mistakes in the future.

Students are Exempt

If a student earns less than $9,000 in a tax year, they are exempt from paying taxes. While students do not have to start paying back student loans until after graduation, that does not exempt them from paying taxes. Students are still responsible for paying federal and state taxes on all income over $9,000.

Having a Home Office is an Automatic Audit

Having a home office will not necessarily lead to an audit. But is important to review what can be claimed and what counts as a deduction to ensure that you are taking the proper steps for claiming your home office. Your numbers must make sense to the IRS.

Holding Accountants Liable for Mistakes

Accountants are not liable for mistakes on your tax return. You are signing the return and it is your duty to double-check all of the information on your return. If you notice a mistake or believe something is off, it is ideal to question your accountant before allowing your return to be submitted.

In Closing

If you are unsure about a tax law, it is important to research the answer or call a professional. Tax laws can change, so what is law this year may not be next year. Stay up-to-date on the laws that pertain to your tax situation to prevent return rejections and audits.

Image credit: Alan Cleaver