10 Popular Tax Myths Busted by Actress Jenny Lorenzo

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We are only a month away from Tax Day (April 15th)! Which means most of us have already filed our taxes or are almost there.

You may have heard a couple of tax myths, such as: “You don’t have to report your income to the IRS if you get paid in cash” or “If you made money online, you don’t have to report it.” But do you know the real tax facts behind each myth?

We took to the streets of Los Angeles, California with actress Jenny Lorenzo to ask random strangers how much they really knew about taxes. Check out our #TaxMitos (a.k.a. #TaxMyths) video to see what people had to say!

#TaxMito #1: You can claim your pet as a dependent

Tax Fact: Even though our pets are part of our family, we can’t claim them as dependents. To the IRS, dependents must be humans and have a social security number.

#TaxMito #2: You don’t have to report cash payments to IRS

Tax Fact: For the IRS, all income is taxable, unless specified as exempt by law. It doesn’t matter if you receive cash without a w-2, 1099 or any other IRS approved income form.

#TaxMito #3: You don’t need to file a tax return until you have the money to pay what you owe

Tax Fact: If you cannot pay the full amount of the taxes you owe, you should still file your return by the deadline and arrange a payment plan with the IRS.

 #TaxMito #4: Filing taxes is voluntary

Tax Fact: If you receive any type of income, you must file your taxes. Therefore, it is not voluntary

#TaxMito #5: Students don’t have to pay taxes

Tax Fact: It depends on your income. If you make money under the IRS income threshold, you may not need to file, but you should because you might miss out on your refund.

#TaxMito #6: You can claim any person as a dependent

Tax Fact: When you file taxes, you can claim any person as a dependent if you are responsible for more than 50% of his/her economic needs and meet certain other conditions.

#TaxMito #7: Money made on the internet is tax-free

Tax Fact: If you consistently sell things online, the IRS may deem your activities to be self-employed business activities, and you will be required to claim the income generally if your net income is $400 or more.

#TaxMito #8: There is no way I can get my refund faster

Tax Fact: The fastest way to get your refund is to file online and choose direct deposit. The IRS expects to issue nine out of 10 tax refunds in 21 days or less when you use e-file with direct deposit.

#TaxMito #9: The IRS will call you if you need to make changes to your tax return

Tax Fact: The IRS will never call you to make changes to your tax return or ask to pay taxes right over the phone. Avoid scams!

#TaxMito #10: There is no tax solution out there that is easy and doesn’t require to leave your house

Tax Fact: This is the new way of doing taxes! With TurboTax Live doing your taxes online is not only easy but convenient. You can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent with an average of 15 years of 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.

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