In all areas of life, we form our opinions based on information and signals we receive for a wide variety of sources. These sources range from accurate to completely inaccurate, well-intentioned to malicious and everything in between. Our taxes are no different. People form opinions, beliefs and notions about taxes that are true, false, hilarious and, sometimes, downright dangerous. One thing leads to another and far too many people start believing tax myths!

Here are a few tax myths that can hurt your bottom line if you believe them:

• Running a business at home is an automatic tax deduction. – At one point, most home businesses could write off their homes as a deduction. Now that working from home has become so common, the IRS has a lot more rules and regulations surrounding this practice. It would be best to talk to a tax professional before trying to claim it.
• A filing extension is the same as a payment extension. The IRS is pretty rigid with its collection cycle. Filing an extension to file does not mean you have more time to pay what you owe.
• More income means more taxes. – The IRS takes your gross income and your net income into account. So more gross income will not necessarily bump you into a higher tax bracket.
• Filing taxes is voluntary – Nope. Everyone must file taxes, every year. Even if you didn’t work or make any money, the IRS still wants to know. So you must file.
• You can claim pets as dependents (Did we mention some were hilarious?) – The IRS views your pets as a hobby. As much as you view Fido as your son, the IRS will not let you claim him as a dependent.
• “I took a big loss in the stock market, so I won’t owe any taxes.” – This one is simply not true, although it sounds logical. The deduction of capital losses against your income is limited to just $3,000.
• If you’re married, you must file jointly. – This is another one that we can understand. Usually filing jointly is the most advantageous for married couples, but if both parties are high earners you may suffer what is called the “marriage penalty.” Combining your incomes may bump you into a higher tax bracket. Talk to a tax pro about what makes the most sense for your family.

While these are certainly not the only myths out there about taxes, they are quite common. It is best to just not assume anything is true when it comes to your taxes. You can never go wrong asking a tax professional!