4 common myths about income taxes debunked

There are many myths that surround the income tax filing process, and these myths can harm taxpayers if they are not careful.

While most people in Florida recognize they have to file taxes on a yearly basis, there are many intricacies and myths that surround the filing process. Here are some common myths that exist about filing income taxes and why they are untrue.

1. There is a way to avoid being audited

According to USA Today, only one percent of all tax returns filed are audited. While no one wants to be audited, this risk is relatively low. Additionally, there is no way to avoid being audited, regardless of income tax bracket, filing status or any other defining factor. Even those who do not make any errors on their taxes and file a perfect return are still at risk for being required to undergo the auditing process.

2. Estimating is acceptable

Many people believe they can estimate the large majority of the figures on their taxes because they have the option to file an amended return later on. While the option to file an amended return is always available if a mistake is made, filers should not rely too heavily on this strategy when they do their taxes. This is because taxpayers who estimate too much are knowingly filing a false return, which is considered a crime.

3. Undocumented earnings do not have to be reported

In many cases, people who earn extra income on the side or earn an income that goes unreported believe they do not have to include this information on their taxes. However, those earning extra money on the side should avoid doing this to avoid consequences. Filers should also remember that at any job they make more than $600 at during any given year will be subject to self-employment tax after receiving a 1099-MISC.

4. Filing an extension extends the payment deadline

Filing an extension to pay owed taxes can be beneficial in cases where extra time is needed. However, this extension only provides extra time to file the return. After the tax deadline in April, any tax money owed starts accruing interest. For this reason, this strategy should not be used as a way to save money.

Reach out to an attorney

Many people in Florida have concerns about filing their taxes and their accuracy. When this occurs, those getting ready to file their taxes, those planning to file an amended return or those facing the auditing process should reach out to an attorney in their area for legal assistance.