Taxes are complicated and confusing for non-professionals. We wanted to take some time to dispel the most common tax myths for you. Myth: Tax Filing is Voluntary When it comes to tax filing, the word “voluntary” doesn’t mean you only have to file if you want to. It simply means you are responsible for calculating (or hiring someone to calculate) the correct amount of taxes you and/or your business owe. The only people not required by law to file their taxes are those individuals who make too little income to file. Myth: Cash Transactions Don’t Have to Be Included in Your Taxes There is a reason many cash transactions are dubbed “under the table.” No matter whether there is little to no paper trail for a transaction, income is income and should be reported on your taxes for the applicable year. Myth: You Can Claim Home Office Deductions As a Result of the Pandemic Many people found out the hard way when filing their 2020 taxes that just because you have a home office does not necessarily qualify you for home office deductions. From tax years 2018 to 2025, whether your employee requires it or you request it, employees who work from home (not independent contractors, freelancers, or small business owners) can no longer claim the home office deduction. While many government and tax programs were amended to make exceptions for pandemic-induced hardships, the home office deduction was not among those amendments. Myth: Filing for an Extension Will Put You at Higher Risk for an Audit Many people are told that if you file an extension on your taxes, you are more likely to be audited. Studies have shown, however, that there is no correlation between extension filing and audits conducted. You can rest easy knowing that your extension is just that – an extension. Myth: Your Fur Babies Can Be Claimed as Dependents Even if they eat at the kitchen table and have their own bedroom, you can’t claim your pets as dependents. But here are some great tax deductions …
Interesting Tax Facts
Just as there are tons of weird and interesting laws in place all over the world, there are also tons of interesting tax facts! We’ve collected a list of facts from the US and the world. Use this fun knowledge to shock a friend or impress a colleague. Historical Tax Facts Lady Godiva took her famous 11th century ride because of high taxes. She pleaded with her husband Leofric, Earl of Mercia, to lessen the burden on his subjects. He made her a bargain: he’d lower the taxes if she rode through the town naked. And she did. Federal tax returns weren’t always due on April 15th. In 1913, it was March 1st, and in 1918 it moved to March 15. The April 15th due date was adopted in 1954. Employers have only been withholding income taxes from employees’ paychecks since the Current tax Payment Act of 1943. Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Madison Square Garden, the New York entertainment venue, has not had to pay property taxes since 1982. In 1696, a window tax was introduced in England and Wales. It was assessed as a flat property tax plus a tax based on the number of windows a home had. As a result, some people bricked up their windows. In the 1800s, single men in Missouri had to pay a “bachelor tax” of $1 annually – equivalent to $20 today. Tax Facts about Food Maine has a special tax on blueberries. It reads: “There is levied and imposed a tax at the rate of 1 1/2 cents per pound on all wild blueberries processed in the State and on all unprocessed wild blueberries shipped to a destination outside the State.” Maine produces about 99% of the United States’ wild blueberries. Illinois, Colorado, and Washington all have a candy tax, but their definition of candy is specifically described as having an absence of flour. This means gummy bears are taxed as candy, while Kit Kats and Whoppers are not. For more, check out this article about the candy tax from NPR. In New York City, bagels are …