Phoebe LydiaIntroduction
Tax season is stressful for many taxpayers, and the internet is flooded with advice — some of it helpful and some downright misleading. There are numerous myths about tax filing that can leave taxpayers confused, potentially costing them money or causing unnecessary stress. In this article, we’re going to clear up 7 tax filing guide myths that often confuse taxpayers, so you can file your taxes with confidence and clarity. If you’re looking for more information about the filing process and deadlines, check out our Tax Filing Basics.
Myth 1: “Filing Taxes is Too Complicated, So It’s Easier to Avoid It.”
For many taxpayers, the thought of filing taxes can be overwhelming. From paperwork to tax forms, it seems like an insurmountable task. However, this myth couldn’t be further from the truth. Tax filing doesn’t have to be complicated, especially when you have the right tools and guidance.
Online tax software, for instance, can simplify the process by guiding you step-by-step through your tax return. Many services also offer support from certified tax professionals, so you can ensure everything is filed accurately. Even if you need help navigating deductions, such as deductible expenses or claiming dependents, you can find resources to assist you.
Instead of avoiding the process, take advantage of available resources. You can even access tax education from trusted sources like ProTaxPlus’s individual tax education page.
Myth 2: “You Don’t Need to File If You Earn Under a Certain Amount.”
This myth is dangerous because it leads many taxpayers to believe they don’t need to file if their earnings fall below a specific threshold. In reality, filing requirements depend on your filing status, age, and whether you earned income. For example, if you’re self-employed and earn more than $400 in a year, the IRS requires you to file taxes, even if your total income is below the typical filing threshold.
Additionally, you may be entitled to certain tax credits or refunds, like the Earned Income Tax Credit (EITC), which you can only claim by filing. Don’t miss out on these benefits. You can check out more about the tax credits available at ProTaxPlus’s deductions and credits page.
Myth 3: “Filing Early Means You’ll Get a Refund Faster.”
It’s a common belief that filing early will result in a faster refund, but that’s not entirely true. While it is generally a good idea to file early if you’re expecting a refund, the speed at which you receive your refund depends on various factors, such as:
- Whether you file electronically or via paper.
- If you choose direct deposit for your refund.
Additionally, filing early won’t speed up the IRS review process if they need to audit your return. Many tax filers also don’t realize that filing early might lead to complications if they haven’t received all their tax documents, such as W-2s or 1099s. If you’re looking for more guidance on filing preparation, check out ProTaxPlus’s Filing Preparation.
Myth 4: “If You File Jointly With Your Spouse, You’ll Always Get a Better Tax Outcome.”
While married filing jointly offers several advantages, including higher standard deductions and access to tax credits, it’s not always the best option for every couple. Depending on your financial situation, it could actually increase your overall tax liability. In some cases, filing separately may benefit couples, especially if one spouse has significant medical expenses or miscellaneous deductions.
The decision to file jointly or separately is a personal one that depends on various factors. To help determine the best approach for you, explore our guide on filing accuracy at ProTaxPlus’s Family Filing Accuracy.
Myth 5: “Tax Deductions Are the Same for Everyone.”
This myth overlooks the fact that tax deductions vary significantly based on a variety of factors. For example, deductible expenses for a homeowner (such as mortgage interest) are different from those available to someone who rents their home. Similarly, your eligibility for deductions like student loan interest or medical expenses depends on your personal situation.
The IRS allows you to take deductions for a wide range of expenses, but these must be itemized and filed correctly to receive the benefit. To ensure you’re claiming the correct deductions, it’s important to seek advice tailored to your circumstances, which you can find on resources like ProTaxPlus’s Tax Education.
Myth 6: “The IRS Will Never Make Mistakes.”
This myth stems from the belief that the IRS is infallible, but in reality, the IRS makes mistakes, too. Whether it’s a clerical error, incorrect information about reported income, or misapplied credits, errors can happen.
That’s why it’s crucial to carefully review your tax return before submitting it. Even small mistakes can delay your refund or trigger an audit. If you do find an error after submission, don’t panic. You can file an amended return and correct the mistake. For more on correcting errors, check out our page on Reporting Income.
Myth 7: “You Don’t Need to Report Income From Freelance or Side Jobs.”
If you’re working as a freelancer or have a side hustle, this myth may be tempting to believe. However, the IRS requires freelancers and independent contractors to report all their income, no matter how small. This includes income earned from gig jobs, freelance work, and even bartering.
The IRS expects you to report this income, and failing to do so can lead to penalties, interest, or even an audit. Fortunately, freelancers can deduct expenses related to their work, like equipment, office supplies, and even a portion of their home office expenses. To learn more about how to file as a freelancer, visit ProTaxPlus’s Tax Filing Guide.
Conclusion
As we’ve seen, there are several tax filing myths that can lead to confusion and mistakes. The key takeaway here is to rely on accurate tax information and not be swayed by misleading advice. Whether you’re navigating tax deductions, understanding tax credits, or figuring out the best filing status, it’s essential to make informed decisions.
Always take time to research, or consider reaching out to a professional for help. Tax filing doesn’t have to be overwhelming when you understand the facts. If you’re looking for more detailed resources, check out our Tax Filing Education.
FAQs
1. Do I need to file taxes if I didn’t earn much this year?
It depends on your income and filing status. Even low earners may need to file to claim refunds or tax credits.
2. Can filing early really help me get my refund faster?
Filing early doesn’t necessarily mean faster processing, but it can ensure you avoid last-minute delays.
3. What should I do if I notice a mistake on my tax return?
You can file an amended return with the IRS to correct any mistakes.
4. Is it always better to file jointly with my spouse?
It depends on your individual financial situation. Sometimes filing separately can result in a lower tax bill.
5. Are there any tax deductions I may be missing out on?
Make sure to research all available deductions, especially those related to homeownership, education, and business expenses.
6. How do I report freelance income to the IRS?
Freelancers must report all income earned, regardless of the amount. You can deduct relevant business expenses to reduce your taxable income.
7. What happens if I don’t report income from my side job?
Failing to report income can lead to penalties, interest, and even an audit by the IRS. Always report your full income.