In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, warns about the dangers of incorrectly choosing your tax filing status to boost your refund. She specifically addresses the common misconception among married individuals who might be tempted to file as head of household for a bigger refund. Dr. Friday underscores the severe repercussions of such actions, including the potential for audits up to six years retroactively and the risk of being barred from future earned income credits. Her advice is clear: honesty in tax filing is not just a legal obligation but a necessity to avoid significant financial penalties.
Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.
When preparing your taxes, don’t take the option of clicking different boxes and saying, “Wait, I get more of a refund if I hit this and I get more of a refund if I hit this.” One of the biggest ones, if you are married, you have to claim married. Okay? So one year I can be head of household and then the next year married or even though you’ve been married for five years, you’ve been claiming head of household because you have children and you get a larger refund versus claiming married. This is a big no-no, guys, and they can go back and audit you for up to six years and have you pay back all of that and eliminate you from ever having to get earned income credit again.
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