Skimm Money: Taxes PUBLISHED JAN 28, 2019

Debunking Tax Season Myths

Together with H&R BlockDebunking taxes

The Story
Taxes: confusing Americans since the beginning of time. Make sure you’re not one of them by reading up on these common tax myths.

Ready.
Great. Let’s break these myths down one by one...

  • Filing taxes is voluntary. Sorry but that’s gonna be a no from me dawg. This myth comes from official tax form instructions that say the US tax system is “voluntary.” Tax protesters like to point this out. But it really just means that taxpayers are allowed to figure out what they owe, vs the gov doing it for them. A lot of Americans have to file a tax return. It’s based on things like your income, age, and filing status. Check here.
  • Electronic filing means you’re more likely to be audited. False. Pretty much everyone and their 21st Century mother files online at this point. And the IRS audit rate has been going down in recent years. The main reasons you might actually be audited include bad math and underreporting your income.
  • Filing for an extension makes it more likely I’ll be audited. False again. See above.
  • Getting an extension means I have more time to pay my tax bill. Actually, getting an extension only gives you more time to file your return. You still have to cough up anything you owe to the Feds by April 15.
  • I just got married so we have to file jointly. You don’t. You can be married and file separately. Although heads up that for the most part, the IRS cuts you a break on your taxes when you file together. There are certain situations when it makes sense to file separately. Here’s more on this.
  • I’m a student so I don’t have to file. Not necessarily. Simply being a student doesn’t have anything to do with whether you need to file a tax return. It depends on your income. For a single taxpayer in 2018, you have to file if you made at least $12,000. And even if you made less than that, you might still want to file if you had federal taxes withheld from your paychecks, because you could get a refund.
  • I’m unemployed, so I don’t have to file. Not necessarily. If you got unemployment benefits from the gov last year, that’s taxable income. You’ll get a 1099-G form with details on all the benefits you received and should use that info to file a tax return if you meet the income threshold.
  • I made a charitable donation so that’s definitely deductible. Actually, it’s only deductible if you donated to a qualified org. Double check here.
  • All refunds are delayed. The IRS pinky promises that most people (more than 90%) get their refund in less than 21 days. If you’re still twiddling your thumbs...
  • I should call the IRS. No, don’t. You’ll thank us later. Calling won’t make your refund come faster and likely just guarantees you get to waste a significant chunk of time listening to bad hold music. If you’re wondering where your cash money is, the best way to find out is online.
  • The IRS just called me. Probably not. The IRS rarely calls if it needs to get ahold of you. It’s a fan of snail mail. If you get a call from someone claiming to be with the IRS and demanding money, it’s likely a scam. Hang up. Report it.
  • You can claim pets as dependents. Haha, no.

    theSkimm
    There’s a lot of misinformation out there about doing taxes. Keep an eye out. And remember you can always leave it to the professionals at H&R Block.

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