Our team at TaxCom, LLC has been helping people file their taxes since 2011. In that time, we have interacted with countless people in a wide variety of professions, including many entrepreneurs, small business owners, and self-employed workers. We have also had plenty of time to become familiar with some popular misunderstandings people have about filing taxes, and we want to correct them. In this article, we’ll be going over three popular myths about filing taxes and debunking them with accurate information.

  • Myth #1: Overtime is Taxed More- One common myth about filing taxes is that overtime pay is taxed at a higher rate. While it’s unclear where this myth came from, we can tell you that it is not true. The only situation in which overtime could be taxed at a higher rate is if your overtime earnings push you into a higher marginal tax bracket.
  • Myth #2: Freelancers Don’t Need to Pay Taxes- Another myth that we’ve encountered about filing taxes is the idea that freelancers, independent contractors, side hustlers, and self-employed people of all stripes don’t need to do so at all. Not only is this not true, but self-employed individuals often need to pay even more taxes than traditional W-2 employees–all the taxes that apply to W-2 workers, as well as the employer’s portion of payroll taxes. If you are self-employed, our team can help you navigate the tax process.
  • Myth #3: Tax Write-Offs Give You Free Money- Lastly, we want to dispel the myth that tax write-offs can be used as a source of free money. Tax write-offs are not a dollar-for-dollar reduction in your tax liability, as many mistakenly believe, but rather a deduction like any other. You shouldn’t spend money just for the sake of a write-off, as this rarely (if ever) results in a net gain.