Getting Rid of Tax Myths


        When it comes to taxes, there is a certain amount of anxiety for most people. According to some surveys, there is a greater amount of anxiety for younger Taxpayers than most. It might be due to inexperience and it might involve a lot of misconceptions that continue to confuse people every year. Not having a clear understanding of how the tax code in the United States works cost many people lots of money every year. In this post we will discuss 2 of the most common tax myths.

          A tax extension means I have until October 15 to pay the Internal Revenue Service. A tax extension usually means there are documents that need to be gathered or complicated situations to handle. If that is the case, an extension is the right choice. However, in the eyes of the IRS, any taxes owed must be paid by April 15. It is not an extension on your tax obligation and penalties and interest can be added to the balance. Not paying taxes that are due can be directly linked to our second myth.

          My tax withholding does not need to be adjusted again. During the first year the Tax Cuts and Jobs Act (TCJA) took effect, all Taxpayers were encouraged to adjust their tax withholding on their paycheck. Many did not, and some found surprise tax bills waiting for them. Now that most understand that the withholding tables have changed, Taxpayers are again encouraged to check their Form W-4 with their employer. This is especially true if they have income from a side hustle which can put them into a different tax bracket. The form has been redesigned this year for that exact reason. Making the change now, gives you a head start on next year.

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