Most people who file a tax return in the U.S. get a refund from the Internal Revenue Service (IRS). And for some people, that refund is sizable. Even if you don’t get a refund, it’s important to file a return to avoid missed or underpayment penalties from the IRS.
Making a mistake on your tax return could delay your refund or lead to a lot of back-and-forth between you and the IRS. Knowing what the most common tax return mistakes are can also help you avoid them.
Each year, millions of taxpayers file their tax returns hoping for a big tax refund. Others are just hoping their tax bill is lower than last year. The average refund amount in 2024 was $2,869. Something that could disrupt getting your tax refund or having the IRS accept your federal return is a mistake on your tax return. A mistake could mean your return ends up not getting filed or you get a letter from the IRS about the error. Here are the most common tax return mistakes.
It might be surprising, but plenty of people forget to put the correct identifying information on their returns. A common error is forgetting to put the Social Security number on the return or filling in the wrong number. If you’re using tax filing software or a fillable form, it can be easy to mistype your number.
Some people also misprint their names when completing their tax returns. You might not think a person would misspell their own name, but it happens. On your return, you must use the name the IRS has on file for you. This is generally the name on your Social Security card. Using a variation, such as leaving out a middle initial or adding one that you didn’t use before, can be a red flag.
Before submitting your tax return, review the identifying information with a fine-tooth comb. Check that your name, address and Social Security number are all correct. Also, verify that your spouse’s name and number are right, plus the names and Social Security numbers of any dependents. If you work with a tax attorney, they also can review your return to ensure there aren’t any errors.
Math errors are one of the biggest tax filing mistakes individuals and businesses make when they don’t have professional help. A misplaced decimal point, an extra or missing zero or even a simple addition or subtraction error can delay your refund or lead to a smaller refund than you were expecting.
If you aren’t good at math, you may want to have someone check the math on your return. Mathematical errors are common tax return mistakes. If you use tax prep software, it should check your math automatically or even calculate totals for you. Even if you use a tax preparation program, it’s smart to have another human review your return before you submit it, just to be safe. Working with a tax attorney and getting help preparing your annual return can mean fewer mistakes and speedier return filing.
One of the most common tax errors is entering incorrect personal or dependent information. Ensure you check your tax return correctly before you submit it. Double-check that your Social Security number, addresses and other personal information are all correct, or it could result in a prolonged audit process.
You should also consult dependents to ensure that they won’t submit independent returns, as the IRS could then flag your return and you’ll get audited if they do.
Businesses should also ensure all details are correct, especially when deducting expenses. While some costs are deductible, like electricity and internet, others, like the entire mortgage, don’t qualify. Filing this information incorrectly can result in an IRS audit and sometimes a fine.
Tax forms are infamously complicated. There are many fields to fill out, and without guidance from a professional, it’s easy to make a mistake. Some fields aren’t labeled clearly, making creating errors in the tax return easy.
The IRS knows the digit values that go into every field, so if you insert the wrong details, their scanners will pick them up. This error is easy to make, but the IRS still takes it seriously and will likely perform a full audit on individuals or businesses that default.
Deductions reduce the amount of income you pay tax on, while tax credits reduce the amount of tax you owe. Either can be useful for reducing your tax bill, but it’s vital to only claim deductions or credits you’re actually eligible to claim.
For example, some deductions, like the student loan interest deduction, are only available to taxpayers who earn below a certain amount. If your income is above the threshold, you can’t subtract the interest you paid on student loans. If you try to do it anyway, the IRS will flag your return and you’ll have to pay the tax you owe, plus interest and penalties.
The IRS also has strict rules about certain deductions or credits. For example, you need to use an area of your home exclusively for business to be eligible for a home office deduction. The IRS can audit you if anything on your return looks unusual, potentially leading to a higher tax bill.
A tax attorney can answer any questions you have about available deductions and tax credits. They can also show you which deductions you might be eligible for that you might have missed, helping you reduce your tax burden.
Even though you may only contribute a small amount to charity, it all adds up. When you work with a professional, you may also be surprised by what qualifies as a charitable contribution. For example, tithes and offerings to nonprofit or religious organizations count under this category, but so do donations to food banks or the Salvation Army.
It’s important to keep track of these donations and tally them up at the end of the tax year for deductions.
Incorrect bank account numbers can affect your tax refund. Many times, taxpayers will forget a number or add in an extra zero. If you are expecting a tax refund, a direct deposit is the fastest and safest way to get your refund. But if you mess up the bank account number, it could delay your refund.
Your filing status might be pretty straightforward, or it can cause confusion. If you’re not married and have no dependents, your filing status is “single.” But if you’re married, should you file jointly or separately? Choosing the wrong status can mean you get less of a refund than you’re eligible for, or it can cause the IRS to flag your return.
For example, the “head of household” status often causes confusion. If you’re not sure which status applies to you, a tax attorney can explain your options and help you choose the filing status that will give you the best refund.
At the beginning of your tax preparation form, you must enter your adjusted gross income (AGI) from the previous tax year. It’s crucial to enter the exact number and refrain from any guesswork. The government uses your AGI to verify your identity and track your income changes for every tax year.
Check your tax return from the previous year when you’re gathering your tax documents to prepare for the current tax year. Since the government uses your AGI to verify your identity, using the wrong number can be a major red flag.
A tax return is not valid unless it is signed. This goes for whether you file your return online or via paper return. If you are filing jointly with your spouse, you must both sign the return, or it won’t be filed.
The April deadline for filing taxes can sneak up on you. If you missed the deadline, file as quickly as possible to minimize interest and penalties from the IRS. Aside from hefty penalties, filing late can also make it more likely for the IRS to audit you.
To prevent filing late, keep all your tax forms in a single location and set time aside before the deadline to file them. This step enables you to monitor your tax forms and file them quicker when the deadline approaches.
What if your tax return is wrong? The attorneys at Polston Tax can help you determine which deductions you can take and which filing status is right for you. We can also ensure your tax return is clean and error-free. We’ll review your return to ensure everything is correct and that you are taking advantage of every tax deduction possible. Schedule your free consultation today.
