Tax season can feel confusing, even when you’ve done it before. With advice coming from a multitude of sources it’s easy to wonder what’s true and what’s not. Many common tax myths create unnecessary stress. We’re here to clear things up so you can feel more confident and informed this tax season. Let’s take a look at a couple of those myths.
Myth #1: A Big Tax Refund Is Always a Good Thing
Reality: A large refund isn’t necessarily bad; but it isn’t always the best outcome.
A big refund usually means extra money was withheld from your paycheck throughout the year. That money could have been available to you for bills, savings, or everyday expenses.
Some people enjoy receiving a refund as a form of forced savings, and that’s okay! But for others adjusting withholding can help keep more money in each paycheck.
The goal is to find what works best for your financial situation.
Myth #2: Owing Taxes Means You Did Something Wrong
Reality: Owing taxes doesn’t mean you made a mistake.
Changes in income, bonuses, side jobs, or withholding adjustments can all affect how much you owe. Many people who owe money simply had taxes that were more closely matched to their actual income.
If you’re unable to pay in full right away, payment options may be available. What matters most is addressing it early and staying informed.
Myth #3: Tax Software and Tax Professionals Get Different Results
Reality: The results should be the same if your information is accurate.
Both tax software and professionals use the same tax rules. The difference is the level of guidance and support.
Tax professionals may be helpful for more complex situations, while software can work well for simpler returns. The best choice is the ones that make you feel confident and informed.
Myth #4: Everyone Should Itemize Their Deductions
Reality: The standard deduction is the better option for many people.
Itemizing only helps if your eligible deductions add up to more than the standard deductions. For many filers, that isn’t the case.
Choosing the standard deduction often makes filing easier and faster, without sacrificing savings.
Sometimes, simpler really is better.
Myth #5: The IRS Will Call You If There’s a Problem
Reality: The IRS usually does not contact people by phone, text, or email.
In most cases, the IRS communicates through official letters sent in the mail. If you receive an unexpected phone call, text message, or email claiming to be from the IRS and ask for personal information, it’s most likely a scam.
Scammers often use fear and urgency, saying things like “you owe money” or “your account will be frozen” to pressure people into acting quickly.
Remember:
- The IRS will not demand immediate payment over the phone.
- They do not threaten legal action without prior notice.
If you’re ever usure about a message, it’s always best to verify before responding.
The Bottom Line
Tax Season doesn’t have to be confusing or overwhelming. Understanding the facts behind common tax myths can help you make better decisions, avoid unnecessary stress, and feel more in control of your finances.
At CUD, our goal is to help you feel informed, confident, and supported during tax season. While we don’t prepare taxes directly, members can enjoy discounts with our trusted services like Turbo Tax and H&R Block through Love My Credit Union Rewards. If you ever have any questions about your finances, saving goals, or next steps after tax season, our team is always here to help!