Tax return preparation can be a bit confusing, especially if you’re self-employed or own rental properties. Unfortunately, the complexity of the process had led to the rise of several harmful myths. Here are a few to watch out for when filing your taxes.

What Are Some Tax Return Misconceptions?

1. Filing for an Extension Gives You More Time to Pay

Filing for an extension means you don’t have to file tax forms by April 15. However, some mistakenly believe this means that they don’t have to make any tax payments by then. Even if you’re granted an extension for completing paperwork, you must still make payments by April 15 or face additional penalties.

2. You Don’t Need to Report Income If You Don’t Receive a Tax Form

Self-employed workers don’t fill out a W4; most receive 1099 forms from their clients. However, you may not receive tax forms from everyone you worked for.

This doesn’t mean you don’t have to report that income. Even cash transactions must be reported or you could face an audit. While reporting self-employment income will increase the tax burden, it could also help you get additional deductions for business expenses.

3. You Don’t Have to File if You Don’t Have Income

While some people don’t need to file income taxes, most do, including students and retirees. The only time you don’t need to file taxes is if the standard deduction is greater than the annual income. Because this is a rare circumstance, assume that filing a return is required unless the IRS says otherwise.

For reliable tax return preparation assistance, work with Roy E. Carter, CPA, PC, in Staunton, VA. Serving Augusta County for nearly 20 years, their certified public accountants provide reliable results for individuals and businesses in areas such as payroll services and IRS representation. To learn more about their services, visit them online or call (540) 886-6251.