3 Tax Myths That Could Land You in Hot Water with the IRS
There’s a lot of information floating around about taxes: some of it true, some of it false; some of it beneficial, some of it could land you in prison. Here are 5 tax myths that, if you believe them, could give you a whole lot of trouble.
Myth #1: I make too little money to get audited
It’s true that you’re twice as likely to get audited if you make over $100,000 a year, but there are still plenty of people from all income levels getting scrutinized by the IRS. Additionally, this year the IRS is focusing on the earned income tax credit (EITC) as a high source of fraud—you have to earn below $52,427 to claim the EITC, which means the IRS will most likely be auditing more and more low-income tax payers.
Myth #2: Students are exempt from paying taxes
Students have to pay taxes just like everyone else, but there are a few tax credits they can take advantage of, like the Lifetime Learning Credit and the American Opportunity Tax Credit.
Myth #3: I can’t claim my child as a dependent if they work
You can still claim your children as dependents, even if they are working and earning a paycheck, but you have to be providing at least half of their support. This doesn’t have anything to do with how much a child earns: even if your teenage daughter makes more than you, as long as you are providing most of her support, you can claim her as a dependent.
Remember, if you do find yourself at the wrong end of an audit, help is always available. Call The Tax Crisis Institute today, and find out how we can help.