Filing your taxes can feel overwhelming, but it doesn’t have to be. Many people make mistakes when they file their taxes, and some can cause big delays or even lead to issues with the IRS. Fortunately, most of these mistakes are easy to avoid. Here are the five most common tax mistakes people make and tips on how to make sure your tax return is filed correctly.
Incorrect Personal Information
It might seem like a small mistake, but entering the wrong personal information on your tax return is one of the most common errors people make. This can happen if your name changes due to marriage or divorce and you don’t update it with the Social Security Administration. It can also happen if you mistyped your Social Security number or entered the wrong address.
Why this is a problem:
The IRS uses your Social Security number to track your tax return, and if it doesn’t match what they have on file, it could delay the processing of your return. Incorrect names or addresses can cause similar issues.
How to avoid it:
Before you submit your return, make sure your name, Social Security number, and address are correct. If you’ve changed your name recently, check to make sure it matches your Social Security card. If you’re filing jointly, double-check that both spouses’ names and Social Security numbers are accurate.
Forgetting to Report All Income
Many people forget to report all of their income, especially if they have more than one job or side hustles. If you’re self-employed or freelance, you might receive 1099 forms instead of W-2s. These are easy to miss, but the IRS expects you to report every penny you earn.
Why this is a problem:
If you forget to report all your income, the IRS will likely catch it. The IRS gets a copy of all the forms you receive (like W-2s or 1099s) and will compare them to what you report on your return. If there’s a mismatch, they might audit you, which can lead to penalties and interest on unpaid taxes.
How to avoid it:
Make sure you have all of your income documents before you file. This includes any W-2s from your job(s), 1099s from freelance work or side gigs, and any other income forms like interest from savings accounts. It’s also a good idea to check last year’s tax return to make sure you didn’t forget anything.
Claiming the Wrong Tax Credits or Deductions
Tax credits and deductions can lower your tax bill, but you need to make sure you’re claiming the right ones. People often miss out on valuable credits like the Child Tax Credit, the Earned Income Tax Credit (EITC), or education-related credits like the American Opportunity Credit. On the flip side, some people accidentally claim credits or deductions they don’t qualify for, which can lead to penalties.
Why this is a problem:
Claiming tax credits or deductions you’re not eligible for can trigger an audit. You could be asked to pay back the amount you claimed, plus interest and penalties.
How to avoid it:
Do your research or consult a tax professional to ensure you qualify for any credits or deductions you’re claiming. For example, if you’re claiming the Child Tax Credit, make sure your child is under 17 years old and you meet other requirements. If you’re not sure about a deduction, like home office expenses or medical costs, ask a professional tax preparer to confirm if you can claim it.
Making Simple Math Errors
It’s easy to make math mistakes, especially if you’re doing everything by hand. Adding, subtracting, or multiplying incorrectly can mess up your entire return. Sometimes people even forget to carry over numbers or make mistakes on their tax tables, which can change the amount of tax they owe or the refund they receive.
Why this is a problem:
A math error can cause delays in your return processing. If the IRS notices a mistake, they might send you a letter asking for clarification or correction. This can delay your refund and create unnecessary stress.
How to avoid it:
If you’re filing on paper, use a calculator or a spreadsheet to double-check your math. Tax software automatically does the calculations for you, so it’s a good idea to use that if possible. If you do make a mistake, the IRS may correct it for you, but it’s always better to catch it before submitting.
Forgetting to Sign and Date Your Return
It might sound silly, but many people forget to sign and date their tax return. Whether you’re filing a paper return or e-filing, this step is crucial. If you forget to sign, the IRS won’t process your return, and you’ll have to redo it.
Why this is a problem:
An unsigned tax return is considered incomplete. Without your signature, the IRS cannot accept your return. If you file electronically, make sure you go through the digital signature process. Paper filers should remember to sign and date the return.
How to avoid it:
Before submitting your return, double-check the last page for your signature and date. If you’re filing online, make sure you’ve completed the e-signature process. It’s easy to forget, especially if you’re rushing, but skipping this step can delay your refund.
Final Thoughts: Take Your Time to Get It Right
Filing your taxes doesn’t have to be stressful, but it does require attention to detail. If you make sure to avoid these common mistakes, you’ll have a smoother tax season and avoid any unnecessary delays or issues. If you’re not confident in your ability to do your taxes correctly, don’t hesitate to reach out to a professional tax preparer.
At Local Tax, we’ve been helping individuals and businesses in Los Angeles County file their taxes accurately since 2009. We can help you get the most out of your tax return and avoid costly mistakes. Whether you need help with income tax, bookkeeping, or filing for your business, we’re here to make the process as easy as possible.
Need help?
Call us at (562) 925-2203. We offer services in both English and Spanish. Let us help you make tax time less stressful!
