Tax season can be stressful, but many taxpayers don’t realize that simple errors on their tax return can lead to costly consequences including delayed refunds, penalties, or even IRS audits. Understanding the most common mistakes and how to avoid them can save you both time and money. For complex situations, it is always a good idea to consult experienced tax accountants or tax professionals to ensure your return is accurate and complete.
- Incorrect or Missing Social Security Numbers
One of the simplest but most frequent mistakes is entering incorrect Social Security numbers (SSNs) for yourself, your spouse, or your dependents. Even a single digit error can delay IRS processing or cause your return to be rejected. Each SSN should exactly match what’s printed on your Social Security card.
This also applies to Taxpayer Identification Numbers (TINs) and expired Individual Taxpayer Identification Numbers (ITINs). Filing with an inactive number can result in processing delays or complications.
- Choosing the Wrong Filing Status
Your tax filing status affects your tax bracket, standard deduction, and eligibility for certain credits. Many taxpayers select “single” when they qualify for “head of household” or misunderstand the rules for married filing separately. Choosing the wrong status can increase your tax bill and cause you to miss valuable credits.
Using IRS resources, such as the Interactive Tax Assistant, can help you determine the correct filing status before submitting your return.
- Math and Calculation Errors
Despite modern tax software, math mistakes remain common. Errors often happen when transferring numbers from W-2s, 1099s, or other forms, or when totaling deductions manually. While electronic filing largely eliminates manual calculation errors, it’s still important to double-check your entries before submitting your return.
- Failing to Report All Income
Not reporting all income is one of the most costly mistakes. The IRS receives copies of your W-2s, 1099s, and other income documents directly from employers, banks, and other payers. Omitting income even from side jobs, rental properties, or investments can trigger penalties, interest, and audits.
Even small amounts of unreported income can create discrepancies with IRS records, so accuracy is essential.
- Errors in Deductions and Tax Credits
Deductions and credits are the primary tools for reducing your tax liability, but mistakes here are common. Miscalculating education credits, the Earned Income Tax Credit, or the Child Tax Credit can lead to reduced refunds or IRS scrutiny.
Taxpayers also frequently misapply itemized deductions or incorrectly claim business expenses. Consulting an experienced tax accountant can help ensure you claim every deduction and credit for which you qualify.
- Incorrect Bank Account Information
If you choose direct deposit for your refund, entering the wrong bank routing or account number can delay your money getting back to you. Always double-check this information before filing to avoid unnecessary delays.
- Unsigned Returns or Missing Forms
An unsigned tax return is invalid. If e-filing, make sure to complete your digital signature. For paper returns, both spouses must sign joint returns. Missing signatures or required forms can delay processing and may require filing an amended return.
- Ignoring IRS Notices
Receiving an IRS notice can be alarming, but ignoring it can worsen the problem. Notices often explain adjustments, request additional documentation, or alert you to discrepancies. Respond promptly and, if unsure how to proceed, seek guidance from qualified tax professionals to avoid penalties or escalating issues.
- Poor Record-Keeping
Accurate record-keeping is critical. Receipts for deductions, income documentation, and investment statements are all needed to support your tax return. Poor records make it difficult to substantiate claims or respond to IRS inquiries, increasing the risk of mistakes or audits.
- Filing Late or Not Filing
Missing the filing deadline or failing to file altogether can result in significant penalties and interest charges. Even if you cannot pay the taxes owed, filing on time is crucial. If you need more time, request an extension but remember that an extension to file does not extend the time to pay.
Mistakes on your tax return can be costly, but many are avoidable with careful preparation and attention to detail. Reviewing your return carefully, using reputable tax software, and seeking help from experienced tax accountants or tax professionals can ensure your filing is accurate, complete, and optimized to minimize your tax liability.
