5 Tax Myths to Avoid
One of the common myths surrounding taxes is that "students are exempt" from paying taxes. If you have a student in your house - or in college - who is gainfully employed, they need to file an income tax return. Regardless of their student status they are subject to taxes on the income they earned. Additionally, when it comes to your student/child, if he or she is employed the myth is that you can't still claim him or her as a dependent. If you have provided more than 50% of your child's support he or she still qualifies as your dependent and you can continue to claim them on your tax return.
What To Do When You Can’t Pay Taxes On Time
You know that tax deadlines roll around the same time every year but what if this year you simply don't have the money to pay your tax obligation to the IRS? The only thing to do, really is to file your taxes regardless of what you owe. Not filing the taxes will not make the tax obligation go away and it can open you up to additional penalties. The IRS has the option to file penalties against you if your don't pay your tax obligation as well as penalties for simply not filing. If you at least make an attempt to pay your taxes that are due, you can avoid the non-filing penalty. If you don't have access to the amount of money you owe the IRS at least make an attempt to pay something. Paying at least a small amount will let the IRS know you are making an effort to address your tax obligation and it will also lower the amount of interest and penalties owed in the long run. Keep in mind that the more you can lower your up front balanced owe, the lower the amount of money you will have to pay the IRS at a later date. Filing your taxes on time also keeps you under the radar and opens you up to less of a chance to be the target of an audit by the IRS.
What To Do With A Tax Refund
Every year at tax time, many Americans look for help with tax resolution issues. Others are busy trying to decide what to do with their tax refund checks from the IRS. If your withholding rate is set too high, you will indeed receive a refund. It is possible to set the rate at a proper level in order to receive no refund whatsoever. Many Certified Public Accountants recommend this method. That way, you will not forgo the interest on the money. Others say, more realistically, that unless you get extremely large refunds, there is no reason to adjust your withholding amount. Just take the refund, they say, and look at it as a coerced savings system. The practical challenge comes when people try to decide what to do with the money, which comes to $3000 for the average taxpayer.
This Tax Season The Cyber Crooks Came Out Of The Woodwork
Whenever tax season rolls around, the crooks seem to come out of the woodwork. This tax season was no different. Internal Revenue Service scams were spread around; the most popular one involved an email that appeared to be a legitimate email from the IRS. This email stated that this year, your tax refund can be available on your Visa or Mastercard. To transfer your refund, it directs you to a website that asks for your credit card number, social security number, card verification value numbers, credit card expiration dates, filing status, amount shown on your tax return, and other personal information. In today's day and age, it is my hope that no one would offer this type of information to an unverified website merely because it looks authentic, but the few people who were duped are surely victims of identity theft and are now feeling the blowback from their fatal mistake.