Busting Tax Myths (Part Two)
People don’t always realize how the myths they believe about something dictate their perspective. In Part 1 of 'Busting Tax Myths' we discussed 4 common beliefs people hold about their taxes that could lead to serious implications due to their lack of understanding between both the federal and state government and themselves.
Fortunately, Schumacher Sama LLP is here to help walk our clients through these myths that can grab ahold and cause mistakes during tax time. The 4 mistakes we discussed in Busting Tax Myths Part 1 were:
- Filing State Taxes is Optional
- Mistakes on Your Tax Return Affect Credit
- Only Higher Earners Get Audited
- You Don’t Have to File if You Can’t Afford it
Feel free to look back at our previous post for more information on any of these 4 myths. In the meantime, let’s discuss 4 more myths in Part 2 of Busting Tax Myths.
- The IRS is Legally Obligated to File a Return for You.
Some language that gets thrown around in conversations about taxes is the IRS will compile a return for you if they suspect fraud. Think about that. Why would you take a part of that statement that references the IRS filing your taxes for you and disregard the other? The IRS is only going to take action on your behalf if there is evidence that supports fraudulent behavior. Expecting the IRS to do something for you like file your taxes is going to hurt you much more than you are hoping it will help. Hopefully this myth is busted and you take the initiative you need to take in filing your own taxes. If you need help, Schumacher Sama is here for you.
- Home Office Deductions is an Automatic Audit.
This may have been somewhat truthful before remote working arrangements became so common in the last 10 years. However, today, claiming a home office deduction is no longer a red flag. As workforce environments have evolved, so has the IRS auditing process.
- Money Made Online Is Tax Free.
There are so many ways to make money online nowadays. Think of Apps, Facebook marketplace, Shopify, and the long list of potential revenue streams people are creating online. It likely isn’t the common person’s first response to fill out a W-9 once they start making money online. But that doesn’t make the money that is being made online tax free. Like any other source of revenue, money made online needs to be reported. If you need help with this, look no further than Schumacher Sama LLP.
- I Don’t Have Time to Do My Taxes.
Taxes are not voluntary. If you don’t have time, it's likely you don’t have time for other mandatory, important responsibilities happening in your life. If you don’t have time to do your taxes it is time to get some support. Schumacher Sama LPP is here for you.
We hope this helped dispel more tax myths you have either heard or believe. Schumacher Sama LLP is a full-service accounting firm in Wauwatosa, Wisconsin specializing in tax preparation, accounting, payroll, audit/assurance, and advisory services. We are committed to your success every step of the way. Let us help you bust the myths and get things right when it comes to your taxes!