Breaking Bad and Breaking Bad Tax Habits

Posted on September 30, 2022

Breaking Bad and Breaking Bad Tax Habits

Tax habits are hard to break, but if the consequences of bad tax habits spell trouble with the IRS, breaking them looks a lot easier. Paying all taxes owed on time is the simplest way to stay compliant, but many times taxpayers often end up in trouble with the IRS because of lack of knowledge of the tax laws. With last night’s Breaking Bad series finale in mind, Dontmesswithtaxes explains the top bad tax habits to break:

“Forgetting to declare all your income, even if you got it illegally” is a bad tax habit that can land taxpayers in big trouble. “The Internal Revenue Service considers most income taxable, regardless of how you got it. Not to overdo the Al Capone example, but not paying taxes on his ill-gotten gains is what landed him in Alcatraz. The real-life Scarface skated on the alleged murders and other reportedly nefarious doings.”

 “Ignoring gambling winnings and losses” is another bad tax habit to stay clear of. Walt and his wife Skyler explained away Walt’s earnings from his criminal meth dealing syndicate as gambling winnings. Doubtless they are unaware that taxpayers who make money from gambling may need to pay taxes on the winnings.

“Most of us also hope we’ll hit it really big one day via our choice of lottery numbers,” Dontmesswithtaxes goes on to say. “When that does happen, perhaps thanks to Walt’s dual-meaning digits 34, 59, 20, 106, 36 and 52, taxes will be taken out before you get your lump-sum payment. Remember, though, that you owe taxes on smaller winnings that aren’t subject to withholding upon payout. The same tax rule is true for the value of prizes you win, too.”

There are some tax rules that many taxpayers are unaware of. If there is a change of situation that affects taxes, taxpayers must consult a tax professional before filing taxes to avoid inaccuracies. Dontmesswithtaxes discusses some of the taxes that might be missed by taxpayers:

“Forgetting to count all your dependents” is a misstep some taxpayers make when filing their taxes.The dependency tax benefit of children can extend to others, both relatives and folks who aren’t officially part of the family, as long as they meet the IRS requirements…If you, however, have an aging parent you’re helping financially, you might be able to count mom or dad as a dependent, even if they, [like Hector Salamanca on Breaking Bad]…live in a senior community.”

Many taxpayers use professional help to file taxes because of the complexity of the tax laws. Keeping yourself up-to-date about the tax changes and being informed about the taxes you need to pay ensures accurate filing of taxes.