Busted! Don't Believe These Tax Myths!
Certified Public Accountants perform several duties. On the one hand, they analyze and record your financial data and on the other, they act as tax accountants wherein they prepare tax returns and devise strategies to minimize tax liabilities.
Unfortunately, there are tax-related myths that have been floating around. This has continued to persist due to misinformation about taxes and often negligence on the part of the taxpayer. Listening to bad advice or believing misconceptions without any clarification can end up costing you thousands of dollars.
To help you avoid falling prey to these misconceptions, Terry Barker, CPA has debunked a few of the most widely believed myths about taxes.
Myth 1: Tax preparers are all similar.
When it comes to tax preparation, it is my perception that clients consider all tax preparation companies and individual preparers as the same.
This idea clients have regarding tax preparation is far from the truth. There is no licensing or educational requirement for tax preparation which can set up a bad situation for the client. The client is entirely responsible for their tax return preparation and compliance. Clients must exercise due diligence during tax preparation and assistance.
Myth 2: Tax preparers are responsible for any mistakes.
Another myth in tax preparation is thinking that if you hire someone to file your taxes, they will be responsible and liable for errors made when preparing for the return. This is wrong. As a taxpayer, you are the responsible party liable for return. So, it is important to be careful when choosing tax preparation services.
Myth 3: You don’t need to report any illegal money.
Another myth is assuming that if it is illegal money, it does not have to be reported. You have to report any income even if it is illegal. You cannot deduct unlawful expenses that are derived from illegal income, but you still have to report the income.
The best way to avoid these myths and mitigate any stress is to employ professional accounting services. To get the best accounting and tax services, reach out to Terry Barker, CPA. My firm specializes in accounting, tax preparation, and business consulting services. My primary goal is to provide insightful advice to enable my clients to make informed financial decisions.