Myths And Misconceptions About Tax Relief: Debunked!


Taxation is a topic that has elicited strong opinions for as long as it’s been around. With governments around the world using taxation as a tool to generate revenue, it’s unsurprising that the subject is often fraught with controversy, confusion, and countless myths. Specifically, the realm of tax relief—a lifeline for many struggling taxpayers—finds itself clouded with misinformation. 

In this article, we dive into some of the most common myths and misconceptions about tax relief and shed light on the realities that many may not know.

1. Tax Relief Programs Are Just A Scam

This is one of the most widespread misconceptions. While there are undoubtedly scams out there that prey on those seeking tax relief, genuine tax relief programs do exist. Established by governmental bodies, these programs aim to provide struggling taxpayers with viable solutions to reduce their tax liabilities. 

For instance, in the U.S., the IRS offers several relief options like Installment Agreements, Offers in Compromise, and penalty abatements. It’s essential to differentiate between scam artists and legitimate tax relief services. Research, seek recommendations, and always be wary of too-good-to-be-true promises.

2. Only The Wealthy Can Benefit From Tax Relief

While it might seem like the wealthy are the primary beneficiaries of tax breaks, this is far from the truth. Many tax relief programs are designed specifically for middle and low-income taxpayers. 

For instance, Earned Income Tax Credits (EITC) or programs that alleviate the burden of medical expenses are aimed at individuals and families with moderate incomes. The wealthy might have more avenues available due to their financial resources, but that doesn’t mean relief options don’t exist for everyone else.

3. If You Use Tax Relief, It’s An Admission Of Guilt

Seeking tax relief is not tantamount to admitting wrongdoing. Many reasons can lead to a taxpayer needing relief – unexpected financial hardships, medical emergencies, or even a simple mistake in a prior tax filing. Taking advantage of a relief program simply means you’re using the resources available to you to address your tax situation.

4. All Tax Relief Companies Are The Same

As with any industry, quality and efficacy can vary dramatically between providers. Some tax relief companies might have a long history of successful negotiations with tax agencies, while others may have numerous complaints and unsatisfactory reviews. It’s crucial to research and select a company with a solid reputation, experienced professionals, and a proven track record.

5. Once You Get Tax Relief, You’re Exempt From Future Taxes

Tax relief doesn’t exempt anyone from their future tax obligations. Instead, it addresses past dues and liabilities. 

Future taxes must still be filed and paid promptly, according to the regular tax schedule. Failing to do so could land taxpayers back in hot water, even if they’ve benefited from relief programs in the past.

6. The Government Will Come After Your Assets Immediately If You Owe Taxes

While it’s true that the government has the authority to seize assets or garnish wages, it typically isn’t the first step. In many cases, tax agencies prefer to work out arrangements, like payment plans, before resorting to such measures. They understand that taxpayers might face genuine hardships and are often willing to find solutions that are beneficial for both parties.

7. Tax Relief Can Clear All Your Tax Debts Overnight

Tax relief is not a magic wand. 

Depending on the type of relief sought and the specific circumstances, it can significantly reduce tax liabilities or provide more time to pay. However, it might not always wipe out tax debts entirely or instantly. Understanding this distinction is vital to have realistic expectations about what tax relief can achieve.


Navigating the maze of taxation is undoubtedly complicated. But making informed decisions becomes even harder when shrouded in myths and misconceptions. By debunking these common myths about tax relief, we hope to offer a clearer understanding of what relief programs entail and how they can genuinely assist taxpayers. 

Always remember, when in doubt, seek advice from professionals or directly from the tax agency. Being informed and proactive can save both time and money in the long run.

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One Easy Way to Slash Taxes

Slash Taxes

Reduce your taxes and increase your savings.  Sounds almost a little too good to be true right?

It’s possible, it’s easy, and I just did it and so can you.

Today is the final day for you to file your taxes for this year.  Did you pay more in taxes than you would have liked?  Do you want to lower your tax bill for next year?  If so, then here is how to do it:

Increase your 401k contribution to your company’s plan.  What percentage of your salary are you contributing to your 401k currently?  Bump it up.  By increasing your pre-tax 401k contribution to your plan you are in effect reducing the amount of income you take home, thus reducing your tax burden.

I recently increased my pre-tax contribution percentage by 8% and found that I will save roughly $1700 this year on my taxes.  It’s that simple.  Increase your savings, reduce your tax burden.  This offers 3 key benefits.

Benefit 1:

You lower the amount of taxes you will be paying for the year.

Benefit 2:

You increase the amount of savings you will have at retirement.  The more you save now, the more you will have later.

Benefit 3:

Because you don’t see the additional money you put into your 401k plan on your paycheck, you won’t spend it, and most likely you won’t miss it.


Budget Smart, Invest Wise


What to do with Your Tax Refund

Tax Refund

It’s that time of year when we begin collecting our W-2’s, 1099’s and other documents to prepare our tax returns.  For some of us, including myself, we get excited about this tax time of year.  The main reason: a tax refund!

I found out last year through a car salesman that the car industry loves tax season.  The reason why?  Because many people end up using their tax refunds to help with a down payment of a new automobile.  A friend of mine last year used her tax refund to purchase a designer purse.

If you get a tax refund, you might view it as a “bonus”.  Unexpected money just fell into our lap.  We get the urge to spend this money on a luxury that we might otherwise have not been able to afford.  It’s YOUR money, do with it as you please, but I will offer some advice on how to spend your tax refund wisely:

Pay down Debt:  Instead of buying a new car with your refund, use it to pay down an existing car loan if you have one.  Make an extra payment or two to a student loan you might have.  Debt is an obligation you will have to pay down eventually, so why not use the extra money to give you an extra step to being debt free.

Go on a Vacation:  Maybe you feel like you have worked hard, and you probably have.  Use the money, or part of the money, to treat yourself to a vacation.  The enjoyment and peace of mind you can get out of an experience far outweighs any “thing” you might want to purchase.  You will have created lasting memories.  Plus, more than likely, you will be more focused upon your return.

Just save it:  Suppose you are 25 years old and receive a tax refund of $1000.  If you used that money to open a Roth IRA or put it in a taxable brokerage account, you will be well on your way to creating future financial freedom for yourself.  Let’s use the following example: You take the $1000 and open a Roth IRA.  If you put in just $100 a month into that Roth IRA, then assuming an 8% return annually, you will have an account balance of well over $300,000 in 40 years.  Granted 40 years is a way off, but that money can help supplement your retirement.  You can also use the refund to build up an emergency fund or to contribute to a taxable brokerage account.

A tax refund is welcomed by everybody who receives one.  You worked hard last year, you paid a little more in taxes then you should have, now it’s the government’s turn to give a little back to you.  Spending our refund on cars, purses and consumer electronics is what American society has conditioned us to do with extra money.  Don’t fall into the trap of what everyone else does with his or her refund.  Use it to create a better life for yourself, for the present and the future.

Budget Smart, Invest Wise