When you are in a crowd there are certain topics that bring about more differences in opinion than others. If you are discussing family vacations, your children’s achievements, or the latest hit movie everyone is bound to jump into the conversation with ease. Bring up politics, taxes, in-laws, or religion and the conversations can become tense rather quickly. When taxes and the IRS are brought one thing is bound to happen – myths are shared as “facts” and everyone believes them. Today Mark Dicus & Company is going to discuss some of the myths about taxes and the IRS why they are not true.
Myth #1 – Do Only Rich People Get Audited by the IRS?
Our first myth is that only rich people get audited. People believe that if they make under $100,000 that they will not get audited by the IRS. Statistics do show that people that make over $100,000 are more likely to get audited, but the reality is that anyone can be audited. People in all income brackets are audited each and every year. The best way that you can prepare yourself to face an audit without any stress is to keep detailed records of your finances in case you are audited.
Myth #2 – Is Taxation Voluntary in America?
Here at Mark Dicus & Company we can hardly believe that our second myth is still believed by very many people, but studies show that people believe that filing taxes is voluntary. This is simply not true. If you make money you have to file your taxes. The amount of money that you will owe on your taxes is extremely individualized, but whether or not you have to file taxes is not.
Myth #3 – Are Students Exempt from Filing Taxes?
Next up on our list is the myth that students do not have to pay taxes. Many people believe that if they are working while they are going to school they do not have to file their taxes. As stated in myth #2, if you make money you need to file taxes. If you are a college student your parents may still be claiming you on their taxes but you still want to file your own return. Many college students find that they are able to qualify for a refund. Since college students are notoriously poor, any amount of extra income is appreciated.
Myth #4 – Can You Claim Pets as Dependents?
Pet lovers would love for our fourth myth to be true. Myth #4 is that you can claim pets as dependents. Even though many pet owners fiercely love their pets and consider them as a part of them family, they cannot be claimed as dependents on your taxes. If you claim a pet as a dependent it is considered fraud and there will be consequences.
Myth #5 – Does Working from Work Increase Chances of Being Audited?
Next up on our list is that if you work from home you will be audited if you take tax deductions for your home office. In the past this may have indeed been a true statement, but the increase in people who work from home has turned this into a myth. If you properly make your deductions for your home office you will be safe from an audit.
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We hope that reading this article has helped you learn something new about taxes and the IRS. Remember that if you ever any questions about your taxes you can call Mark Dicus & Company and we can help you answer them.