Your Top Five Tax-Filing Myths – Busted!

Question

“With tax time getting nearer, I’m getting more stressed about getting my taxes done. There’s a lot of information out there, and it’s hard to suss out what’s true and what isn’t. Any advice you have would be appreciated.” — Max from Berea, KY

Answer

With so much tax-time misinformation circulating around the Internet, the water cooler and the dinner table about taxes, the truth is sometimes hard to find. Incorrect information at tax time can literally cost you – by causing you to pay for services that are available for free or by leaving money on the table in the form of refunds and credits you don’t claim.

We want to shed light on five common tax time myths to provide accurate information to help all taxpayers prepare and file their taxes. Let’s count them down:

Myth #5: Affordable tax preparation is not available – federal may be free, but you always have to pay for state returns.

FACT: Free online federal and state tax preparation is available for individuals and families with a combined income of $58,000 or less in 2013. While MyFreeTaxes.com and the Free File Alliance both offer free federal and state tax preparation and filing, MyFreeTaxes.com is the only online tax initiative that provides free federal and state tax filing in all 50 states and the District of Columbia.

Free in-person tax filing is also available in your community at Volunteer Income Tax Assistance (VITA) sites. Here, IRS-certified tax preparers will help you file your taxes for free, if you made $52,000 or less in 2013.

Myth #4: You must be married, have children, owe taxes or give up federally funded public benefits to claim EITC.

FACT: None of the above are true. However, you must meet other qualifications, including income and age restrictions, to be eligible for the Earned Income Tax Credit (EITC). Legislation is currently before Congress seeking to expand eligibility for EITC.

Myth #3: People with disabilities do not have to file income taxes if their income is too low.

FACT: You may not be required to file a tax return, but it may be in your financial best interest to do so. If you worked in 2013, filing taxes could put extra money back in your pocket. Even if you did not have money set aside for taxes in your paychecks, you may be eligible for valuable tax credits, like the EITC, that you can only receive if you file your taxes.

Myth #2: Tax refunds affect federally funded public benefits for people with and without disabilities.

FACT: Tax refunds DO NOT count as income when determining other federally funded public benefits.

Myth #1: Free tax help is “too good to be true.”

FACT: Free tax help is available and has been since VITA began in 1969. What started as face-to-face volunteer tax help in communities nationwide has now expanded to offer free online tax preparation to eligible filers earning $58,000 or less per year.

There are many online options, but MyFreeTaxes has been around since 2009 and is the only free online tax preparation and filing service for eligible taxpayers to file both federal and state taxes in all 50 states and the District of Columbia. Plus, it’s a collaboration between three trusted nonprofits: Goodwill Industries International, National Disability Institute and United Way sponsored by the Walmart Foundation.

Now that you can separate fact from fiction, make your tax return work better for you by filing your federal and state taxes for FREE if your combined household income was $58,000 or less in 2013.

For more information and disability-related tax resources, please see the IRS’ People with Disabilities webpage.