7 Common Misconceptions about Taxes
October 12, 2016
By Sharon Copeland
It's hard to get excited about taxes.
Taxes are complicated but everyone has to do them. Here are some common misconceptions you may have heard about doing your taxes. I'll break them down for you so you can feel confident this upcoming tax season.
Misconception 1: “I didn’t make much money last year so I won’t file”
Think again! Even if you are under the filing threshold you should still file as you may be eligible for credits which may result in a refund.
Misconception 2: “I was paid in cash so I don’t have to report my income”
Wrong! Income from all sources should be reported, including tips.
Misconception 3: “I was enrolled in school full time last year so I am entitled to education credits”
Maybe, however, the school must be an eligible educational institution and the expenses must be qualified education expenses, amongst other requirements.
Misconception 4: “It’s possible that I may owe this year so I don’t want to file”
Still file! It is important to file even if you will end up owing, because if you are entitled to a refund in the future, your refund check will be held until you have filed for all previous years.
Misconception 5: “My mortgage interest can be deducted so that I owe less taxes”
Somewhat, mortgage interest can only be deducted if you itemize expenses. However in many cases the standard deduction ends up being greater than the sum of your itemized deductions.
Misconception 6: "Once I’m retired I no longer have to pay taxes"
Wrong! If you are still receiving income, especially from investments, you may still owe taxes. On the bright side, you will get a larger standard deduction and will fall into a lower tax bracket.
Misconception 7: “I can do my taxes myself - that’s what the internet is for”
Perhaps, however our VITAS are passionate about what they do and are trained to get you back your maximum refund.
As part of the IRS Volunteer Income Tax Assistance (VITA), Catalyst Miami prepare taxes at no cost for households that make under $64,000 annually. Want to learn how to become a VITA to help yourself and our clients straighten out these and even more tax misconceptions? You'll be helping Miami families get their greatest refund possible. Register at Tinyurl.com/vitamiami and come to our training sessions!