Monday, March 21, 2011

When to be Honest

Honesty is the best policy – or so I’ve heard. Being honest, however, can be difficult when you know that a little bit of lying could really help you out.

This isn’t just a random thought – but actually a few weeks worth of contemplating what to do about my taxes. Last year I made about $6,800 in wages – but I made $10,000 in scholarships and grants. Of that $10,000, only $5,000 was used to pay tuition – so that leaves me $5,000 of taxable income from my scholarships.

I spoke with two accounting majors about this issue. One told me that most students do not claim their scholarships – and will never be audited by the IRS. That was a great answer, and I was excited to get a huge tax return. But then I talked with my old roommate Johnny – one of the most honest guys I’ve ever met. He told me that although the IRS will not audit a student, I should report my scholarships on my taxes to be completely honest.

So I did. And my tax return dropped from almost $600 to $277. BUT, I feel so much better that I told the truth on my taxes. A simple little form that probably wouldn’t make that big of a difference to the economy or government spending, but it helped me have a clear conscience.

So now I agree; honesty really is the best policy.

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