7 Tax Myths Debunked Infographic

As a tax preparer, it’s crucial to know common tax myths that can mislead clients and lead to costly miscommunications or omissions. One widespread myth is that filing taxes is optional, stemming from misinterpreting IRS forms. While the system is “voluntary” regarding information provision, the obligation to file is mandatory. Not filing can result in severe penalties once the IRS catches up. Another myth is that students are exempt from paying taxes. Students must file returns if they earn above the threshold or are financially independent. Utilizing free tax software can help offer affordable services to financially challenged students while highlighting the benefits of filing. Some believe under-the-table or online earnings aren’t taxable, but any income over $400 must be reported. The outdated myth that claiming a home office deduction triggers an automatic audit persists, although good record-keeping is essential to avoid scrutiny. Misconceptions also include the belief that the IRS will file a return for the taxpayer and that audits are only for those earning over $100,000. Lastly, some clients mistakenly think the tax preparer is liable for errors in the filing, but accuracy depends on the information provided by the client.

source: https://ultimatetax.com/blog/debunking-7-tax-myths-for-your-clients/

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