After having done taxes for several years, a number of people believe that they know a a whole lot about filing taxes and the applicable rules and guidelines pertaining to their specific situation. However, unless you are a tax professional, it will be hard for you to stay updated with all the changes since the tax code is undergoing revisions nearly annually and there are hundreds of different codes for almost all situations. What makes matters worse is not the fact that there is so much tax information that need to be learned, but that some of what you have believed in is no longer true, or was never really true. Every year, people file their tax returns while believing in a number of tax myths, hence they are either throwing away money or running into serious IRS problems.

It’s a common assumption for people to automatically file for a joint tax return when they get married. This is basically not true as they actually have the alternative of filing under ‘married filing separately.’ In most cases, filing under this is more expensive than filing a joint tax return. In special cases, however, you can save money as result of making use of this option. It is advisable for couples with two income earners to try using both methods and then evaluate which option is better. You can actually use one method now, and then the other option the next year, and still find yourself saving a lot of money for both occasions. Because a person’s tax responsibility changes every now and then, it is important that this will be done yearly. Knowing which option to take necessitates proper communication with your spouse as doing otherwise may result to more serious IRS problems.

There are still so many questions regarding the validity of deducting sales taxes. Mostly, only people who have experience filing taxes before 1986 still believe in this tax myth. It was the last year that tax payers are allowed to subtract sales taxes for their purchases. However, today, some states have somehow allowed this kind of policy to take effect once again. By 2004, 2006 and even 2007, sales taxes can either be deducted from state taxes or federal income taxes. They had to choose between the two types and could not make the deduction on both sets of taxes. There were seven states, Wyoming, Alaska, Washington, Florida, Texas, South Dakota, and Nevada that authorized the tax deduction and residents in those states actually received a substantial break. To avoid a possible IRS problem, you may want to check once in a while as to the status of this policy.

Another common myth is brought about by the fact that a certain law existed before, but was later on abolished. There was a policy before stating that anyone aged 55 and above may exclude up to $125,000 of his/her gains from a sale of a house. This is a benefit that can only be taken once in a person’s lifetime. With the newer laws now, the provisions are actually much better. One amendment took out the age requirement and raised the amount to $250,000 per person. Thus, a married couple can claim tax deductions up to $500,000 from gains made on the sale of a house. Later, the law was revisited making the benefit available to anyone every two years. In other words, anyone can sell a house and exclude a maximum of $250,000 from his/her taxes every two years.