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You don't have to be a tax protester to harbor mistaken ideas about the Tax Code -- many perfectly normal people do. According to an informal poll of Enrolled Agents by the National Association of Enrolled Agents, here are some of their clients' most common misconceptions.
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My Social Security benefits aren’t taxable.

Depending on the amount of other income that a taxpayer has to report, their benefits may be taxable – but the maximum amount of Social Security benefits that must be included is 85 percent.
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White woman with upset expression holding crumpled stock certificate. Hand on head. Isolated on white background. Investment failure theme.

I don’t need to report stock sales if I bought other stocks with the proceeds.

Many taxpayers think that if they reinvested the money from a stock sale, or otherwise didn’t see any cash, that it doesn’t need to be reported. But stock sales outside of retirement accounts must be reported.
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I’m a student and only work part-time, so I don’t have to file a return.

Filing requirements are based on filing status, dependency status, amount of income, and whether it is earned or unearned – not whether you’re a student.
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It’s my preparer’s fault.

No matter who prepares your tax return, the taxpayer is legally responsible for its contents.
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My deadbeat cousin lives in one of my rental properties. He doesn’t pay much, but I can still treat it as a rental.

There are limits on how far below fair market rental value you can go – including the fact that expenses cannot exceed income. There may be other limits as well: The Tax Court has suggested that a fair rent for a family member could be up to 20 percent below market.
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My spouse and I separated last year and lived apart for most of the year – so I can file Single.

Unless you were legally divorced or separated as of the end of the year, you cannot file as single.
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If I take dividends instead of wages from the S corp I own, I can save on payroll taxes.

In terms of S corp shareholders and employees, reasonable compensation must be paid before any dividends or loan repayments are permitted – and failing to properly report wages could result in reclassification of the dividends or loan repayments as wages, with penalties.
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I’m a signer on a foreign bank account, but not the owner – so I don’t need to disclose it.

This area is under particularly heavy scrutiny right now, according to the NAEA, and there are a number of factors that determine the need to disclose these accounts and/or the assets. Since the penalties for non-disclosure are pretty severe, clients will want to make absolutely sure that they don’t have a responsibility to report.
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