Filing federal tax returns can be a daunting task, and even small errors can lead to delays, penalties, or missed opportunities for savings. To help taxpayers navigate the process smoothly, we’ve compiled a list of the most common mistakes and expert tips to avoid them.
1. Inaccurate Personal Information
One of the most frequent—and surprisingly simple—errors is submitting incorrect personal details. This includes mistakes like entering the wrong Social Security number, misspelling names, or providing an incorrect date of birth.
It’s easy to mistype a digit or letter, especially when using tax software or filling out forms manually. Additionally, your name on the tax return must exactly match what’s on your Social Security card. Adding or omitting a middle initial, for example, can lead to confusion.
Such errors can delay processing or even result in the IRS rejecting your return. Before submitting, double-check all identifying information for yourself, your spouse, and any dependents.
2. Math Errors
Math mistakes remain one of the most common errors on tax returns.
A misplaced decimal point or an extra zero can drastically affect your refund or result in you owing more taxes than necessary.
While tax software can help catch some of these errors automatically, it’s still a good idea to manually review your calculations before submitting, especially if you’re preparing your return without professional help.
3. Incorrect Filing Status
Choosing the wrong filing status can significantly impact your tax return by affecting your tax bracket, credits, and deductions. For instance, some individuals mistakenly file as “Single” when they qualify as “Head of Household,” which generally offers more favorable tax rates.
Similarly, married couples often struggle with whether to file jointly or separately. Filing jointly usually results in a lower overall tax burden, but in some cases—such as when one spouse has high medical expenses or significant deductions—it may be better to file separately.
If you’re uncertain about your correct filing status, the IRS offers tools like the Interactive Tax Assistant to help you choose the most appropriate option.
4. Claiming Ineligible Credits or Deductions
Taxpayers often overestimate the deductions or credits they’re entitled to, leading to potential red flags on their return. For example, some deductions, like the student loan interest deduction, are income-restricted, meaning you cannot claim them if you earn above a certain threshold.
Others may mistakenly claim a home office deduction without meeting the strict requirement of using the space exclusively for business purposes. Incorrectly claiming tax credits like the Earned Income Tax Credit or the Child and Dependent Care Credit can result in penalties, interest charges, or even an IRS audit.
5. Wrong Bank Account Information
Direct deposit is the quickest way to receive your refund, but entering the wrong bank account number can create major delays—or, even worse, send your refund to the wrong person.
A single wrong digit can direct your refund to a different bank account, and trust me, recovering it will be a time-consuming ordeal.
If the IRS detects that the bank information provided doesn’t match what it has on file for you, it might revert to mailing a paper check, which could take weeks or months to arrive. Always double-check your bank routing and account numbers before filing, especially if you’ve recently changed banks or accounts.
6. Forgetting to Sign the Return
If you’re filing a paper return, forgetting to sign it is an easy but costly mistake—your return will be considered invalid, which means it won’t be processed until you correct the oversight.
For joint filers, both spouses must sign the return, whether filing electronically or by mail.
E-filing systems generally prompt you to give a digital signature, but it’s easy to overlook this step if you’re filing manually.
If one spouse is unavailable or unable to sign, you can use a power of attorney or other legal document to complete the process.
Bonus Tips: Filing Too Early or Missing Deductions
Filing your return before you’ve received all necessary forms can lead to mistakes, such as omitting income reported on late-arriving 1099s. Make sure you have all your tax documents in hand, including anything related to new situations, before filing to avoid having to amend your return later.
On the flip side, many taxpayers miss out on deductions they’re eligible for, either because they forget to claim them or aren’t certain they qualify. Tax software or consulting with a tax professional can help ensure you’re not leaving money on the table.
Final Thoughts
Avoiding these common mistakes can save you time, stress, and money. Take the time to review your return carefully, use available tools and resources, and consider seeking professional advice if needed. A little extra effort now can prevent headaches down the road.