Avoid These Common Tax Filing Mistakes That Could Cost You Money
Filing your taxes can feel overwhelming, and even a small mistake can delay your refund or trigger an IRS audit. With tax season in full swing, it’s important to double-check your return and avoid costly errors.
Here’s a list of common tax mistakes and how to avoid them to ensure you maximize your refund and stay compliant with the IRS.
1. Entering Incorrect Personal Information
It may seem like a small mistake, but entering the wrong Social Security Number (SSN), name, or banking details can cause major delays in processing your return.
🔴 Common Errors:
❌ Misspelling your name (It must match your Social Security card exactly.)
❌ Incorrect Social Security Number (Double-check all SSNs, especially for dependents.)
❌ Entering the wrong bank account number for direct deposit (This can cause delays or send your refund to the wrong person!)
✅ How to Fix It:
Always review your SSN, name, and birthdate before submitting.
If you changed your last name (e.g., due to marriage or divorce), make sure the IRS has the updated record.
Use a secure tax filing software that automatically detects common errors.
💡 Pro Tip: Filing electronically helps reduce typos and mistakes, ensuring a smoother tax process.
2. Filing Under the Wrong Status
Your filing status affects your tax rate, deductions, and credits. Choosing the wrong one could mean paying more taxes than necessary.
🔴 Filing Status Options:
✅ Single – Unmarried and don’t qualify for other statuses.
✅ Married Filing Jointly – Best for most married couples to get higher deductions.
✅ Married Filing Separately – Only beneficial in certain cases, such as when one spouse has significant medical expenses.
✅ Head of Household – If you’re unmarried with dependents, this can result in a larger standard deduction.
✅ Qualifying Widow(er) – If your spouse passed away recently and you have a dependent child, you may qualify for this status.
✅ How to Fix It:
Use the IRS interactive tool to determine your correct filing status.
Check if Head of Household applies to you—it offers better tax benefits than “Single” if you qualify.
💡 Pro Tip: If you’re divorced, double-check who is claiming the child as a dependent to avoid IRS conflicts.
3. Missing Out on Tax Deductions & Credits
Many taxpayers leave money on the table by not claiming deductions and credits they qualify for.
🔴 Commonly Overlooked Tax Breaks:
✅ Student Loan Interest Deduction – Deduct up to $2,500 if you paid interest on loans.
✅ Self-Employment Deductions – Home office, internet, phone, and marketing expenses can be deducted.
✅ Medical Expenses Deduction – If medical expenses exceed 7.5% of your income, you can deduct them.
✅ Child & Dependent Care Credit – Get up to $8,000 for childcare expenses.
✅ Earned Income Tax Credit (EITC) – Low-to-moderate-income workers could get up to $7,430.
✅ How to Fix It:
Review all potential deductions and credits before filing.
Keep track of receipts and organized financial records throughout the year.
Use tax software or consult a tax professional to ensure you maximize your refund.
💡 Pro Tip: Many deductions require itemizing instead of taking the standard deduction—calculate which benefits you more.
4. Failing to Report All Income
If you earn money from multiple sources, the IRS expects you to report everything—not just your main job’s W-2.
🔴 Income You Must Report:
✅ Freelance & Side Hustle Income (1099-NEC or 1099-K from clients, Upwork, Fiverr, etc.)
✅ Rental Income (Even if paid in cash!)
✅ Stock Dividends & Investments (1099-DIV or 1099-B)
✅ Gig Work (Uber, DoorDash, Instacart, etc.)
✅ Unemployment Benefits (1099-G)
✅ How to Fix It:
Cross-check all 1099 and W-2 forms against your bank deposits.
If you don’t receive a 1099 but earned income, you still have to report it!
Use accounting software to track all income sources year-round.
💡 Pro Tip: The IRS gets copies of your W-2 and 1099 forms—so if you don’t report them, you could face penalties or an audit.
5. Math Mistakes & Calculation Errors
Simple math errors can cause refund delays or IRS red flags.
🔴 Common Math Mistakes:
❌ Adding or subtracting incorrectly when calculating income or deductions.
❌ Entering incorrect tax bracket rates.
❌ Forgetting to carry over amounts from previous sections.
✅ How to Fix It:
Use tax software to automate calculations and catch errors.
Double-check your math if filing manually.
💡 Pro Tip: The IRS will correct basic math errors, but they won’t fix missing deductions or credits—so check carefully!
6. Not Signing & Dating Your Return
It sounds simple, but forgetting to sign your tax return can cause serious delays.
🔴 How to Avoid This Mistake:
✅ If filing by mail, sign and date your return before sending it.
✅ If filing electronically, follow the steps to digitally sign with an e-file PIN.
💡 Pro Tip: Filing electronically reduces errors and ensures your return is submitted successfully.
7. Waiting Until the Last Minute to File
Procrastinating on taxes leads to errors, missed deductions, and possible IRS penalties.
🔴 Why You Should File Early:
✅ Faster refunds – The IRS processes early filings first.
✅ Avoid fraud – Filing early prevents identity thieves from filing in your name.
✅ More time to correct mistakes or get missing documents.
✅ How to Fix It:
Mark tax deadlines in your calendar.
Gather all tax documents early (W-2s, 1099s, receipts, etc.).
If you need extra time, file for an extension (but still pay what you owe by April 15).
💡 Pro Tip: Tax software helps organize your paperwork early, so you don’t scramble at the last minute.
Final Thoughts: File Smart & Avoid Costly Mistakes
Taxes don’t have to be stressful—by avoiding these common mistakes, you’ll get your maximum refund faster and prevent unnecessary IRS issues.
🚀 Need help filing correctly? Parks Projects NJ is here to guide you through the process.
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