Tax trends and myths

A recent TurboTax survey found that a lot of Americans believe they don't make enough money to file taxes, and that means they could be missing out on money in their pocket. Lisa Greene-Lewis, CPA and TurboTax expert, clears up a few tax myths. 

Watch the video above or read the transcript below.

Video transcript:

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Tracy Byrnes: It's tax season. And TurboTax, not surprisingly, has dug into the numbers and got some great research from it for us all. Lisa Greene-Lewis, CPA, TurboTax expert, is here to give us all the details on what they found. I love a good survey, Lisa, so I'm really curious to know what you guys found. So first, tell us what exactly was the survey about?

Lisa Greene-Lewis: So we conducted a survey and it was conducted by Tucker Research. And we surveyed 4,000 Americans, and it was all about misconceptions that Americans have about filing taxes.

Tracy Byrnes: It's funny because everyone is like, so frightened to death of filing their tax returns. So what was the result? What did it reveal?

Lisa Greene-Lewis: Yeah, so we found across generations various misconceptions. The first one, 20% of Gen-Z believe that students don't need to file taxes, and 27% of boomers believe that if you don't make the IRS threshold, that you don't need to file and you can't get a refund. And then 13% of Gen-Zs believe that if you're paid cash, that you don't need to file your taxes. Also, we found that 17% of Gen-Z believe that you can write off anything as a business expense, and then 40% of all of the respondents were not able to correctly match what the earned income tax credit was.

Tracy Byrnes: Wait, so why does Gen-Z believe they can write off anything?

Lisa Greene-Lewis: I don't — I'm not sure, but if people have a business, I do encourage them to write off anything directly related to their business. They should feel empowered to do that. Just keep your receipts. You can write-off your travel, your mileage, any equipment, or your home office. You definitely want to make sure you do that if you are using your home office or traveling so that you can lower your taxable income.

Tracy Byrnes: I don't mean to laugh, but this is a sad state on our educational system because we clearly do not teach this stuff in school, that these people don't understand this. All right, so what surprised you the most out of all of this, other than the fact that Gen-Z has no clue about their taxes?

Lisa Greene-Lewis: Yeah, I would say that people don't realize that if you don't make the IRS threshold, you don't need to file your taxes. That is a big misconception. People should absolutely file if they had federal taxes taken out of their paycheck, and also if they're eligible for credits, like the earned income tax credit. I know the IRS every year they say that they have over a billion dollars in unclaimed refunds, and a lot of that belongs to people who make under the IRS threshold, and especially students.

One of the other data points about the earned income tax credit, that kind of didn't surprise me. It aligned with the IRS. They say that 1 out of 5 people missed the earned income tax credit. But that is a substantial credit for people. It's $7,830 for a family with three kids. So people that are eligible should definitely make sure that they claim that.

Tracy Byrnes: And for students, in particular, nowadays it's so simple to file your tax return. You could do it on your phone. So there's almost no excuse to get it done, right?

Lisa Greene-Lewis: Yes, it's really simple. TurboTax makes it easy. You could snap a photo of your W-2, your 1099, and in some cases, people are 50% done with their taxes. And also, TurboTax, we continue to offer done-for-you tax filing experiences with unparalleled ease. And right now, we have the TurboTax mobile app offer. So if you do your taxes yourself on the mobile app, you can file your federal and state taxes for absolutely free, regardless of your complexity. And that's until February 18.

And then we continue to offer our TurboTax free edition. If you have a simple Form 1040 only, you can have earned income tax credit, child tax credit, student loans, and some interest, but no schedules. But your federal and state are absolutely free, no other charges.

Tracy Byrnes: Yeah, that's amazing. And people should remember that. And especially because it's so good to get started because then every year all the info just rolls forward and it makes life so much easier. Lisa Greene-Lewis, CPA and TurboTax expert, thank you for sharing all that.

Lisa Greene-Lewis: Thank you for having me.

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Editor's Note: The content was reviewed for tax accuracy by a TurboTax CPA expert for the 2024 tax year.