Tax Myths: True or False?

Taxes are complex and with complexity comes confusion. There are a lot of myths about how taxes work and what they impact. So this week we’re checking your knowledge with a true / false quiz.  Here are two easy ones to get you started. 

True or False #1:  I filled out my W-4 (withholding form) when I started my job 5 years ago, so I don’t need to worry about it.

This is false! If you have been reading our weekly articles we covered a few weeks ago the importance of updating your W-4 at least annually. If you have changes in your life (married, divorced, new dependent, additional income, etc) you’ll want to update when those happen too. The IRS provides tables to give employers guidance on the amount of taxes to withhold from your paycheck based on the information in the W-4 withholding form that you complete when hired (or update later on). 

True or False #2: I am a student. I don’t have to pay taxes. 

This can actually be true or false! If you are a student and still claimed as a dependent on someone else’s tax return (likely your parents), whether you have to file a return yourself or not depends on how much you earned. If you earned less than the IRS minimum, you may still want to file if your employer took out taxes in order to be eligible for a refund. Take a look at your W-2 and the IRS website to see if you need to file.

To finish our Tax Myth quiz, read our full article here.