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Common Tax Filing Mistakes to Watch Out For

Common Tax Filing Mistakes to Watch Out For

Making tax filing mistakes can cost you or turn into a hassle. They may cause you to overpay or to receive a lower refund than you should get, or they may lead to a delay in disbursement of your refund. They may also lead to fines or higher interest costs. Some of these errors even increase the likelihood of an audit.

So, review this list of common tax filing mistakes, and be diligent about double checking the information you enter if you’re preparing your tax return yourself. If you haven’t seen it, take a look at the Interactive Tax Assistant tool offered by the IRS. Of course, you also might consider using a professional tax preparer.

Avoid These Common Tax Filing Mistakes

  • Entering incorrect basic identifying information. Yes, some people misspell their name or get their social security number wrong, or get it wrong for a spouse or dependent. Or, some don’t realize they qualify for a certain filing status, like head of household, that offers some tax advantages. Be careful entering your bank account number and routing number if you’re getting a refund via direct deposit. Also, some people miss entering one or more pieces of this information.
  • Making math errors. This is one of the most common tax filing mistakes of all. Don’t do calculations in your head (even simple addition and subtraction); use a calculator. Double and even triple check all figures and all math. And be careful when dealing with the somewhat complex formulas on tax forms.
  • Choosing the wrong deduction. There will be a difference in how much you owe or how much your refund is depending on whether you take a standard deduction or an itemized deduction. And the difference can be significant. Figure out which type of deduction is right for you. If you’re claiming the standard deduction, check that you claim the right amount (for example, it’s higher if you’re 65 or older).
  • Omitting a signature. If you don’t sign your tax return, it’s not valid. In most cases, your spouse must also sign if it’s a joint return. Make sure you physically sign a paper return or digitally sign an electronically filed return.
  • Having discrepancies between your numbers and those reported by other parties. The IRS receives information about your wages, independent contractor earnings, interest earnings, and more on forms filed by employers, banks, etc. The numbers you report need to match those reported on W-2s, 1099s, K-1s, and so on.
  • Entering information on the wrong line. Some lines can look similar. For example, you don’t want to input your tax-free IRA rollover on the line for taxable IRA distributions. Pay close attention and double check where you enter everything, including when the instructions for one line tell you to enter a figure on another particular line.
  • Not taking all the write-offs you’re entitled to. Many people are afraid to claim certain write-offs in the fear that it will trigger an audit. For example, there’s a myth that taking a home office deduction is a red flag to the IRS (but it’s not, provided you use the home office because you’re self-employed). You should claim any and all write-off to which you are legally entitled under tax filing rules.
  • Failing to include required forms. Many circumstances necessitate the inclusion of other forms besides your Form 1040. Read all the instructions and watch for additional form requirements. Fill supplemental forms out completely and carefully as well.
  • Not filing on time. It’s not uncommon for people to procrastinate and start preparing their tax return at the last minute. It’s also not uncommon to run into a problem that delays completion of the return and causes them to miss the tax filing deadline. If this happens, be sure to file for an extension. Also, remember that there are fines if you don’t make payments on time.
  • Paying improperly. Make sure you’re credited for any payments you make toward your tax bill. If you’re paying by check (electronically or by mail), include Form 1040-V with your payment. Or, use one of the government’s free payment processing sites, Electronic Federal Tax Payment System (EFTPS) or Direct Pay. There are also a few approved payment processors that allow you to pay by debit or credit card.

Looking for a professional tax preparer?

Get in touch today and our tax experts will help you minimize your tax bill, maximize your refund, and avoid potentially costly mistakes.

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We're a well-established tax and accounting, mortgage, and financial advisory firm operating since 2000. We serve our clients from three Central Florida locations. Our expertise extends to both domestic and international concerns when it comes to investing and doing business in Florida and beyond.

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