The time to file 2014 tax returns is around the corner. Today’s post is shared to help you avoid common misconceptions about filing taxes.
- If you file an extension, don’t be tricked into thinking you don’t owe money now. It only allows you to extend the time your return must be filed, but does not affect the tax due date. If you do not want to incur interest and penalties pay taxes owed by the tax due date.
- A big loss in your investments doesn’t mean you won’t owe tax. Deduction of capital losses against ordinary income is limited to $3,000 per year. Also keep in mind that if you reinvested or received dividends, they are income and are taxed. Many think because they have large losses it offsets income dollar for dollar.
- You must always report tips, bonuses, or dividends even if you were paid in cash.
- A minor child must file a tax return if more than $6,200 was earned in 2014, or if total unearned income is more than $1,000. Even if they earned less, they’ll want to file if income tax was withheld to get a refund.
- Income earned outside of the U.S. is taxable and must be reported.
- Before you decide to file your own tax return make note that licensed preparers are required to know the most up to date tax laws, regulations, and codes and how those can be applied for your benefit.
It’s always wise to discuss your tax situation with a CPA or other tax professional who can help you navigate through all of the regulations that apply to your situation, especially as a business owner. If you don’t yet have a tax preparer, contact those you know to ask for a referral to someone they know and trust.