Answered on Quora.
We need to know why they are saying this about you, assuming you are a man.
Is it because you do not have a girlfriend or a wife or you do not date women? If so, then just say, “No, I am not gay. I am just a straight guy who has no luck with women.”
Is it because of the way you act? One of the most painful things I ever had to realize in my life was that there was something about my behavior, the way I walked, talked, looked, sat, stood, moved, my mannerisms, how I held a cup of coffee, etc. that was leading many people to think I was gay.
I was crushed when I heard this because I never thought I was effeminate and, in fact, I very much dislike effeminate behavior. The implication that people thought I was effeminate in some way was soul-crushing. I was suicidal for months afterwards.
The problem is that in your case this is probably due to behaviors that have become so deeply rooted in you that they are almost impossible to change.
In recent years, I have decided to act a lot more masculine, and I hardly hear this anymore. Unfortunately, now I knock things over, break things, make a lot of noise, and even get into yearly fistfights, but if this is the price I have to be for people to stop calling me gay, it’s worth it. I have always had a masculine core, and I have found that most straight men do, even men who you would rarely suspect it in.
I would say that if you increase the masculinity of your behavior, you might be hearing this a lot less often. I used to hear it a lot as a young man, but now I hear it maybe once every two years. 99.9999% of the time, people think I am straight.
There is a particular sort of Hell for straight men who are often thought to be gay. It’s not a pleasant place at all to be, and it leads to all sorts of problems. These problems will follow you all through life like a black cloud that never goes away, everywhere you go and everything you do, until you deal with the fundamental issue.
You may find gay and bi men after you a lot, which is no fun. In my case it was like mosquitoes in Alaska. You may start wishing you never see a gay or bi man again. I did.
Gay men will often hassle you and insist that you are really gay, you are just pretending to be straight, and you need to come out already. This mind game can have devastating effects on a young straight man unless he has a very strong mind.
Gay men may sexually harass you and fire you from a job for not having sex with them (this happened to me and one of my friends) or try to blackmail you (this happened to two of my friends who rented rooms from gay men who after a while said you’re either having sex with me or I throw you in the street). And when you tell people you are not gay, typically they will not believe you and will accuse you of lying. It’s exasperating to say the least.
Lots of people are getting you wrong on the most fundamental level.
Probably the worst of it is you get all of prejudice of being gay without any of the fun.