Taxation is a complex topic, and misconceptions often cloud the path to financial clarity. It's essential to separate fact from fiction, dispelling these 5 popular tax myths to ensure a smoother filing experience this year.
5 Popular Tax Myths
Myth #1: Extension Equals Audit Risk
Ever heard that applying for a tax extension puts you on the IRS radar? Not true. Research shows no link between extensions and audits. Filing early doesn't raise audit odds either – less than 1% face that scrutiny.
Myth #2: Pay First, Then File
Waiting until you can pay your taxes? Don't! File by April 15th, whether you can pay or not. IRS offers payment plans. Plus, deductions and credits can turn the tables. Last year, folks received an average refund of $3,100!
Myth #3: Nursing Home Dilemma
Worried that your parents in a nursing home can't be dependents? Fear not. The "live with you" rule doesn't apply to parents. If you support them, they're your dependents, regardless of their residence.
Myth #4: Your Pet's Write-off
Love your furry friend, but writing off pet expenses? Not so fast. Unless they're business-related (like guard dogs) or medically necessary (like a service dog), pet costs aren't deductible.
Myth #5: Inherited Tax Woes
Inheritance equals tax headache? Not quite. In most states, estate taxes are paid by the deceased's estate, not you. Only six states levy inheritance tax. And for most, close family ties mean you're off the hook. Gifts you receive? Typically, no tax there either.
Don't let tax myths stress you. Butler Squared Consulting has your back. Easily and accurately file with confidence. Meet a Butler Squared Consulting expert – they'll prepare, sign, and file your taxes correctly.