Tax Deductions and Credits Myth Busted! 8 Common Tax Misconceptions Debunked Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxBlogTeam Published Feb 11, 2019 - [Updated Jul 22, 2019] 3 min read Tax season is approaching, and you may have a handful of questions that are top of mind as you plan to file. Can you deduct cryptocurrency losses? Do students have to file taxes? Can you pay your taxes later if you file an extension? Can you claim your dog or cat as a dependent? Because it’s likely that you may have heard a few myths while seeking answers to these questions, we asked a handful of our TurboTax Live experts to bust some of the top tax misconceptions before you sit down and file your taxes. https://blog.turbotax.intuit.com/wp-content/uploads/2019/01/TT-Live-Myth-Busted-FINAL.mp4 Myth One: Filing a Tax Return is Optional It depends on how much income you make. Not everyone must file a tax return, however, most working adults are required to file (just like me)! – Miguel Burgos, CPA for 6 years Myth Two: A Crypto Loss is Not Tax Deductible Believe it or not, a cryptocurrency loss is not a virtual loss, it’s a real tax loss. So, if you sold cryptocurrency, you can definitely deduct that loss when filing. – Ernie Sadashige, CPA for 13 years Myth Three: Filing an Extension Means I Can Pay My Taxes Later Filing an extension does not mean you get to pay later, however, you do have time to finish filing the paperwork if you file an extension by the tax deadline (which is April 15 this tax year). It’s always a good idea to file early – especially by the tax deadline. – Claudell Bradby, CPA for 19 years Myth Four: I can claim my pet as a dependent. If you can give me a social security number for your dog, then sure! – Miguel Burgos, CPA for 6 years Myth Five: I can deduct moving expenses for my family. Moving expenses are no longer tax deductible on federal tax returns, except for active duty military. But you still may be able to claim moving costs on some state tax returns. – Ernie Sadashige, CPA for 13 years Myth Six: If You Can’t Afford to Pay Your Taxes, It’s Better Not to File at All If you find out you owe a lot of money – you might consider not filing, but it’s a bad idea. The IRS will eventually reach out to you and you’ll pay a lot more with interest and penalties. It’s better to set up a payment plan with the IRS. – Ernie Sadashige, CPA for 13 years Myth Seven: Students/Retirees Don’t Have to File a Tax Return Students and retirees do have to file their taxes, however, it’s on an individual basis. – Claudell Bradby, CPA for 19 years Myth Eight: Married Couples Should File Separately in Order to Save We see many couples filing separately in order to save. However, I like to explain to them that married filing separately usually isn’t the best way to save on taxes because the IRS limits some deductions and credits for separate filers. As long as you can – file jointly! There are a wider tax bracket and lower tax rates, plus there are more credits and benefits. – Miguel Burgos, CPA for 6 years Don’t worry about remembering specific requirements when it comes to filing — TurboTax will ask you simple questions and give you the tax deductions and credits you’re eligible for based on your entries. Another myth may be that you need to leave the comfort of your home to get help from a tax expert, but know that if you have any questions, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent with an average of 15 years experience to get your tax questions answered without even leaving your house. A TurboTax Live CPA or Enrolled Agent can even review, sign, and file your tax return. Previous Post Snowed In? Here’s Your Adulting To-Do List Next Post Treat Your Single Self With These Tax Benefits Written by TurboTaxBlogTeam More from TurboTaxBlogTeam One response to “Myth Busted! 8 Common Tax Misconceptions Debunked” We are on disability social security and. Make $32,000 a year as a couple . Can we file taxes and claim unearned income credit? Reply Leave a ReplyCancel reply Browse Related Articles Tax Planning 5 Popular Tax Myths, Busted Tax Tips 10 Popular Tax Myths Busted by Actress Jenny Lorenzo Tax Planning Should You Worry About Being Audited This Tax Season? Health Care Demystifying the Affordable Care Act Tax Planning Tax Extensions: Extension to File, Not Pay Education 6 Common FAFSA Mistakes [Infographic] Taxes 101 What Are the Most Common Tax-Filing Mistakes? Taxes 101 11 Most Popular Reasons for Filing Late or Not Filing a… Tax Deductions and Credits What Does My Relationship Status Mean for My Taxes? Tax Tips How to File an Extension: A Step-By-Step Guide
We are on disability social security and. Make $32,000 a year as a couple . Can we file taxes and claim unearned income credit? Reply