The Most Common Mistakes in Filing Tax Returns You Should Avoid

  • admin
  • January 23, 2025
  • 6 min read

The Most Common Mistakes in Filing Tax Returns

Filing your tax return can feel overwhelming, especially with complex tax laws and strict deadlines. Even the most diligent taxpayers sometimes make errors that can lead to delays, penalties, or missed opportunities for refunds. Understanding the most common mistakes in filing tax returns—and how to avoid them—can save you time, stress, and money.

Here, we’ll explore frequent tax return errors, explain why they happen, and share actionable tips to help you navigate tax season with confidence.

Why Filing Taxes Can Be Tricky

Tax filing is often viewed as daunting due to the ever-evolving tax laws, detailed documentation, and numerous forms involved. Missing a step or misunderstanding a rule can lead to mistakes, some of which may trigger audits or penalties from the IRS.

By identifying common pitfalls, you can ensure your tax return is accurate and complete, reducing the likelihood of costly errors.

  1. Incorrect or Missing Personal Information

A simple typo can create significant headaches. Common mistakes include:

  • Misspelled names
  • Incorrect Social Security numbers (SSNs)
  • Mistyped bank account details for direct deposits

The IRS relies on this information to process your return and distribute refunds. Even minor inaccuracies can result in processing delays.

How to Avoid It:

  • Double-check all personal information before submitting your return.
  • Verify details directly against official documents, such as your Social Security card and bank statements.
  1. Filing Under the Wrong Status

Choosing the correct filing status is crucial as it impacts your tax rate and eligibility for certain deductions. Common errors include filing as “Single” when eligible for “Head of Household” or selecting “Married Filing Separately” when “Married Filing Jointly” would yield better benefits.

How to Avoid It:

  • Review IRS guidelines to determine the most advantageous filing status for your situation.
  • Use online tools or consult a tax professional if you’re unsure.
  1. Mathematical Errors

Tax forms require numerous calculations, from adding up income to figuring out deductions and credits. Even minor arithmetic mistakes can result in overpayment, underpayment, or a rejected return.

How to Avoid It:

  • Use tax preparation software or double-check calculations manually.
  • If you’re filing on paper, consider enlisting a tax professional to review your work.
  1. Overlooking Taxable Income

Many taxpayers mistakenly omit income from less obvious sources, such as:

  • Freelance work or gig economy jobs
  • Interest or dividends from investments
  • Unemployment benefits

Failing to report all income can lead to IRS inquiries or penalties.

How to Avoid It:

  • Gather all income-related documents, such as W-2s, 1099s, and brokerage statements.
  • Cross-check reported income against your bank records and payment apps.
  1. Missing Out on Deductions and Credits

Tax deductions and credits can significantly reduce your tax liability, but they’re often overlooked. Examples include:

  • Student loan interest deduction
  • Earned Income Tax Credit (EITC)
  • Child and dependent care credits

How to Avoid It:

  • Familiarize yourself with available deductions and credits for your filing year.
  • Keep thorough records of eligible expenses, such as tuition payments or childcare costs.
  1. Failing to Sign and Date Your Return

Surprisingly, one of the most common mistakes on tax returns is forgetting to sign the document. An unsigned return is considered invalid, delaying processing and potentially causing you to miss the deadline.

How to Avoid It:

  • Review your return before submission to ensure all required signatures are present.
  • For joint filers, both spouses must sign.
  1. Ignoring the E-Filing Option

Paper returns are prone to errors, from illegible handwriting to missing pages. E-filing reduces these risks, ensures faster processing, and offers immediate confirmation of receipt.

How to Avoid It:

  • Opt for e-filing whenever possible.
  • Take advantage of free e-filing services provided by the IRS or approved providers.
  1. Missing the Filing Deadline

Failing to file on time results in penalties and interest charges, which can quickly add up. Some taxpayers also forget to request an extension if they’re unable to meet the deadline.

How to Avoid It:

  • Mark important tax dates on your calendar.
  • If you need more time, file for an extension using Form 4868. Remember, an extension to file doesn’t mean an extension to pay taxes owed.
  1. Underpaying Estimated Taxes

Self-employed individuals or those with side hustles often fail to pay sufficient estimated taxes throughout the year. This can lead to penalties during tax season.

How to Avoid It:

  • Calculate your estimated taxes quarterly and make payments on time using IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS).
  1. Failing to Keep Records

Accurate record-keeping is essential for filing an error-free tax return. Common oversights include losing receipts for deductible expenses or misplacing prior-year returns needed for reference.

How to Avoid It:

  • Maintain organized records throughout the year.
  • Use digital tools or apps to store receipts and documents securely.

What to Do If You’ve Made a Mistake

If you discover an error after submitting your return, don’t panic. The IRS allows you to file an amended return using Form 1040-X.

Steps to Correct Mistakes:

  1. Identify the error and gather supporting documents.
  2. File Form 1040-X electronically or by mail.
  3. Monitor your amended return’s status using the IRS “Where’s My Amended Return?” tool.

Need More Time to Finish your 2024 Tax Return? File a Tax Extension & Delay Tax Day until October 2025.

Get an instant 6-month extension in just 5 minutes, with no IRS explanation needed. The fast, streamlined online process makes filing simple, so you can avoid penalties and get extra time to prepare.

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