The tax system is more misunderstood than Marilyn Manson. Let’s set the record straight once and for all with a few busted myths:
Myth #1 – I was paid in cash, so I don’t have to file a tax return
In fact, you’re probably required to file a tax return, more so than if you were paid with a paycheck. Cash payments usually mean you are “self-employed,” and if you made $400 or more from self-employment you are required to file a tax return. Common self-employment jobs include babysitting, lawn mowing, helping on a farm, construction, and music gigs.
Myth #2 – It costs money to file a tax return
No, it doesn’t have to cost money, but it may be a little trickier. Sure, you can pay a professional to prepare your return for you, which makes the process massively easier. Or you can use DIY tax software like TurboTax or H&R Block to file your return for a modest fee. But if you made less than $56,000, the Volunteer Income Tax Assistance (VITA) program will file your return for free if you schedule an appointment. The IRS offers several free-file products as well. If none of these work for you, nothing is stopping you from filling out the forms yourself and mailing your return to the IRS.
Myth #3 – My parent claimed me on their tax return, so I don’t have to file my own
Even if your parent claimed you as a dependent on their tax return you still must file a tax return if you made over $12,200 in 2019, (less in prior years).
Myth #4 – I didn’t make enough so I don’t have to file a tax return
Even if this one is true, you might want to file a tax return anyway. Look in Box 2 of your W-2. If there is a number greater than $0 in that box, the IRS withheld tax from your paychecks. You may not owe that much or anything at all. If you file a tax return you could receive some or all of that back as a tax refund.
Myth #5 – Once I file my return, I’m done with that year
Don’t throw your W-2s into the harbor just yet. The IRS recommends individuals keep their tax records for a minimum of 3 years. Often your financial aid office will ask for W-2s or a tax return from several years ago. The IRS will keep copies of everything for 4 years, but it is difficult to get. Just keep your records in a locked file cabinet or safe and you’ll have them when you need them. Especially if you plan to run for public office someday.
Happy filing! (by April 15th)
~OSFA
FinancialAid@MissouriState.edu
417-836-5262