Top Income Tax Myths

Quick: If your teenager works a part time job, do they need to file taxes?

Here's another: If you made $1,000 on eBay last year, is that taxable?

The IRS is more than happy to clear up those questions, as it busts the top tax time myths for 2010.

Facebook Brings Old Myths Back to Life

Most of us try to be honest with the IRS. For instance, we don't try to claim our dog as a dependent. But in this age of Facebook and Twitter, many old income tax myths have come back to life.

Listen to them and you can be audited or worse. The IRS's top tax myths for 2010:

Are Taxes Voluntary?

* Myth Number 1: Income Tax is voluntary or unconstitutional.

Sorry, it's not, despite what Irwin Schiff and others claim. Be prepared to pay big legal fees if you decide not to fill out a 1040 form.

Tax Free Earnings Online?

* Myth Number 2: Internet earnings are free from taxes.

Income you earn on eBay, or anywhere for that matter, is legally taxable. If you make more than a few hundred dollars, it's best to report it. Starting next year, eBay will have to report your earnings, under a new law.

What about Kids?

* Myth Number 3: Students don't have to file

You may hear that teens and students don't have to file. That one is partially correct. Teens don't have to pay tax if they earn less than $9,500 a year.

But they should fill out a 1040 if their employer took out any tax money, or they won't get a refund. That's the only way to get withheld taxes back.

The IRS has a whole section of its Web site dedicated to common tax myths.