Although tax day for 2014 is officially over, it’s never too late to look at taxes. Every year, thousands and thousands of people get into trouble with the IRS over unfiled returns or via audits- nobody wants a financial death sentence on their hands- so it’s a great idea to look at some of the most commonly held beliefs regarding taxes and why they might be doing you a lot of harm.
- “Voluntary” Taxes
Some people argue that within the tax code there is a caveat that renders paying taxes voluntary. This couldn’t be farther from the truth. This doesn’t mean that paying taxes is voluntary, but rather that individuals are responsible for paying the correct amount.
- The IRS Will File Your Return
Very much like the thinking above, many people claim that the IRS is legaly obligated to file a return from you. This, unfortunately, isn’t the case and will ultimately leave you very angry. The IRS may determine to file a return for you if they suspect fraud, but otherwise, you’re on your own.
- Working From Home
A few decades ago, when home offices were fairly rare, the IRS was very likely to single out people who worked from within the confines of their home for an audit. These days, since home offices are highly common, claiming a tax deduction won’t automatically bring the IRS to your door. There’s no real need to be worried unless your home office doesn’t fall within what the IRS defines as a home office.
- Illicit Activity
A commonly held belief is that illegal earnings aren’t taxable- however, the IRS couldn’t care less what crimes you commit. Drug money, blood money, embezzlement, and legal earnings are all the exact same to IRS agents. All they care about is that you file a tax return on your income so the government can make some money. But just because it’s taxable doesn’t mean the cops won’t come banging on your door.
- Internet Money
Why would you have to pay taxes on internet earnings? Even though all internet earnings aren’t illegal, the logic is the same as the above myth. The IRS doesn’t care where your money came from- the only thing that matters is that you pay your portion of fees back to the government (as long as you make more than $400).
- My Accountant Will Take Any Blame
Ultimately, hiring an accountant is your prerogative, but make sure you hire a really good one because if they make a mistake, you’re responsible.
You’ve probably heard one of these myths uttered, and it might have caused you to file late, not even file at all, or even file wrongly. So know this, it’s in your best interest to get in contact with a quality tax consulting firm if you’re in any trouble with the IRS. The Defend Tax Payer’s 35+ years of tax experience can help you out of any hole and into the future. Call them today to start to get a fresh start!