During tax season, you might get some conflicting advice on tax preparation and filing. Believing certain tax myths can result in getting audited or paying more than you should. Even if you have a tax preparation specialist, you should know the following common misconceptions that can lead to costly sanctions.

What to Know About Tax Myths

1. Filing a Return Is Voluntary

Some taxpayers think filing taxes is optional. This may stem from a misunderstanding about the term "voluntary" in the Form 1040 instruction book's description of the tax system. The IRS has addressed this confusion and clarified that it refers to the responsibility of taxpayers to determine the accurate amount of tax they owe the government.  

Similarly, don't believe that the IRS will do tax preparation and filing for you if you fail to do so. This myth will result in fines for late filing and late payment, which is 5% of your overdue taxes per month and can reach up to a maximum of 25%. 

2. You're Not Responsible for Your Tax Preparer's Mistakes

Even if you leave your tax preparation to a professional, you're not off the hook for their potential errors or oversights. The IRS warns that taxpayers will ultimately be liable for any mistakes on their returns, even if their tax preparers are the ones who committed the fraud.

Double-check all the paperwork before signing and submitting your taxes. Additionally, make sure that your tax preparer is reputable and trustworthy so you can avoid the hassle of an audit.

3. Itemizing Deductions Always Results in Big Savings

Unless the difference between your itemized and standard deductions are significant, you won't be saving a lot in taxes by detailing your deductions. Also, know that going for itemized deductions will mean you cannot obtain a standard deduction.

Moreover, recent tax reforms have increased the standard deduction while reducing possible itemized deductions. Your tax preparer can advise you further whether or not itemizing deductions will be beneficial for your situation.

Trust Simplified Tax in Sparta, WI, to expertly guide you through the filing process. Backed by more than 30 years of experience, their top-notch team offers high-quality services, including tax consultations, payrolls, federal tax forms, and other accounting services. Call them today at (608) 269-2633 to make an appointment, or visit their website to send them a message online.