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Tuesday, July 16, 2024

Five Common Tax Myths, Busted

You may feel overwhelmed with tax questions about your home office expenses, cryptocurrency investments, side hustle income and more, and it’s natural to ask everyone in your life how they plan to handle money received and money owed on their next tax return. But beware—the tips you receive just might be more myth than fact.In matters that are considered complicated, we tend to believe any opinions that come our way. However, in matters as serious as property, public opinion should not be our guide. If you recently bought a property, it is important to understand your tax liabilities. Any confusion in this regard can cause major financial losses.

Property tax can be paid anytime

You can pay your property tax on both a semi-annual and an annual basis. In case of a delay in payments, a penalty is charged. However, municipal bodies are often seen extending schemes to encourage taxpayers to make payments by waiving penalty amount by a huge margin.

Gifts and Money Sent From Friends and Family on Venmo Is Taxable

Nope. Gifts are excluded from income regardless of the amount or the payment method, says Eric Bronnenkant, CPA and head of tax at Betterment.

The Central government decides the rate of property tax

Land in India is a state subject and district municipal bodies assist them in collection of property tax. Typically, urban-local authorities are responsible for evaluating your property and collecting taxes accordingly. Your property tax amount includes utility bills such as power, water and drainage.

I Can Take a Home Office Deduction Since I Now Work From Home

If you’re a W-2 employee, the answer is “unfortunately, no,” says Doug Campbell, CPA and vice president of tax support at Liberty Tax.“Before 2018, you could potentially deduct ‘employee business expenses.’ However, the 2017 [tax overhaul signed by President Donald Trump] repealed that deduction,” he says. “So, if you are an employee, any unreimbursed business expenses are no longer deductible, including home office costs.”

Your Tax Preparer Is Responsible for Any Mistakes on Your Return

Wouldn’t it be bliss to pass the buck like this? Alas, it’s untrue. You, as the taxpayer, are still legally responsible for any and all information on your tax return.“While a professional tax preparer is likely much better informed on the tax code and its ever-evolving nature, they are still constrained by the information they receive from the taxpayer,” says Burnette, at Outlook Financial Center.

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