With the tax season on, it comes as no surprise that a number of scams and myths start swirling around. Here we take a look at some of the most common income tax myths and the right way to go about it.
Tax-Deductible Work Clothes
Not all work clothes are tax-deductible. The only type of clothing for which you can take a deduction is the one that is specifically required by your employer and which can’t be worn outside the workplace.
Bringing in receipts for regular work clothes and dry cleaning, believing that they are tax deductible is not going to help.
Estimating your Numbers
Relying heavily on estimating your numbers and believing that it is fine to do so equals crime. Though you can file an amended tax return later, this equals wastage of precious time and chances are that you might forget to file an amendment later.
Filing an Extension for Extra Time
Filing an extension for extra time to pay your taxes may seem like a good strategy to save money, but it is not the case. You get extra time, but if you owe money and file six months later, it will be more expensive because of the interest.
No Money Record, No Need to Report It
This is plain wishful thinking on an individual’s behalf. If you are earning money and don’t report it, then it’s a big no-no or as experts put it, a serious infarction. Remember to report all your earnings honestly, no matter what.
Making More Money Puts You in a Higher Tax Bracket
People mistakenly believe having an additional income will put them in a higher tax bracket. This is not the case. Only the income exceeding the tax bracket threshold is taxed at a higher rate.
At Tax Help MD, our tax experts are ready to answer your queries and solve your tax-related problems in the best possible way. Call us on 888-632-4506 to get free consultation and advice.