With tax season in full force, making sure you file your taxes correctly the first time can save headaches, delays, and financial penalties. While mistakes are common, most of them can be easily avoided with just a little preparation. Here are some of the most common tax filing mistakes and how to avoid them.
While you might be anxious to check “taxes” off your to-do list, completing this task too early could come with more complications. Before sitting down to start your taxes, take an inventory of all your documents. Ensure you have access to all necessary primary information, including income documents such as W-2s, 1099-INTs, or 1099-Bs, as well as deductions like 1098 mortgage interest and records of charitable donations.
Missing documents can force you to file an amended return later, which will delay any refund.
Your filing status determines your tax bracket, deductions, and credit eligibility. Choosing the incorrect one can cause delays, penalties, or interest. For example, if you file single when you really are head of household, you may pay more in taxes and receive a smaller refund. If you make this mistake, or one similar, you can file an amended return, but that will also delay any refund.
To avoid this mistake, review all the filing statuses carefully and take note of any life changes, such as marriage, divorce, or providing support for dependents, that may affect your filing status. If you are unsure, you can use the IRS.gov Interactive Tax Assistant to help choose the correct status if more than one applies.
Filing your taxes with accurate personal information may seem like common sense, but mistakes happen. Simple errors, such as misspelled names or incorrect Social Security numbers, can cause the Internal Revenue Service (IRS) to delay or even reject your filing.
After you complete your taxes, take a few minutes to double-check all your information one last time. Make sure all names exactly match those on Social Security cards and confirm all dependent information is correct. Taking those few extra minutes could save you from delays later.
From side-gig income to savings interest, inaccurately reporting income can trigger an IRS notice. When you are filing for your taxes, take all sources of income into account, such as your job, freelance work, interest, dividends, and investments. The IRS’s automated matching system will compare your return to forms already filed by your employers and financial institutions, so even small errors can cause headaches.
Another common mistake during tax season is missing signatures, especially if you are filing jointly. Both spouses must sign the form, and you can avoid this error by filing your return electronically, getting both signatures, and sending it to the IRS.
If you or your spouse is a member of the armed forces or a taxpayer with a valid power of attorney, you may be exempt. But, in that case, it is best to consult those specific tax rules before filing without the second signature.
If you are expecting some type of tax return, making sure your bank information is correct is the first step in getting your funds promptly. Incorrect routing or account numbers can slow or misdirect your direct-deposit refund, which is something no one wants!
During your filing, verify your financial institution’s routing number and your full account number when setting up your direct deposit. You can usually find these when you log in to your accounts online or on a paper check.
The best way to avoid making simple mistakes is to just take your time while filing your taxes. However, if you are ever unsure, you can reach out to a tax professional to help with your specific situation so that you can make sure you are filing correctly the first time around.
While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
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