With so many tax resources and tools
available today, many people feel comfortable filing their own taxes. However, without a second set of eyes on your tax returns, you’ll want to be sure to double check, if not triple check them. Some of the most common errors made on personal tax returns are small things that could likely be caught by carefully reviewing them before filing.
Giving your tax returns another look after completing them could help save you money in the long run, as filing them with a mistake
could delay any refunds due
, reduce the amount of your refund, or lead to an even larger tax bill including penalties and interest. There is also a chance that a tax filing error could put you on the radar of the Internal Revenue Service
(IRS) and increase your odds of being audited.
Be on the lookout for these common mistakes when filing your own taxes, or when reviewing returns prepared by a tax professional:
1) Basic Information Errors
One common mistake is incorrectly entering your basic identifying information. To avoid this, be sure that all of the information on your tax return matches exactly
with the information on your social security card, W2s, and other tax forms. If you have recently changed your name
, you should file your taxes under the name that appears on your new social security card. If you have not yet received your updated social security card, confirm with the Social Security Administration that your name change has been processed. If it hasn’t, you’ll need to wait until you receive your card, or file your taxes under your old name. Double check all of your basic information before filing your taxes. Even a small typo could cause a potentially significant tax issue.
2) Incorrect Filing Status
- Misspelled names
- Incorrect birthdates
- Wrong addresses
- Missing or incorrect social security numbers
Choosing the wrong filing status is another common tax mistake. There are five different status options
, and your status plays a big role in how much you owe in taxes. If you are not sure which status applies to you, take the time to research what each one means. Do not simply guess, as filing with the wrong status could result in costly penalty fees.
Here is an overview of the various tax filing statuses:
- Single: Not married, or are divorced or legally separated
- Married Filing Jointly: Married and filing taxes with your legal spouse
- Married Filing Separately: Married but filing two separate tax returns. Often used if there is a reason one person would owe less if you do not file jointly. Each person is responsible for their taxes due.
- Head of Household: Unmarried person who has paid at least half to support others. Typically, a single or divorced parent with children.
- Qualifying Widow(er) with Dependent Child: Someone who has lost a spouse and is supporting children.
If you’re still not sure which is the correct filing status for your situation after looking into them, it could be worthwhile to consult with a tax professional
3) Calculation Errors
Plenty of errors are made on the math related to taxes — ranging from basic addition and subtraction mistakes to complex calculations. Typos are easy to make on a calculator or online tool. Typically, the more complicated
the tax return, the greater the chance of calculation errors. If you have a very involved tax return you may consider hiring a professional tax preparer, but if you do decide to go it alone be sure to double-check your math or use tax preparation software
that will do the calculations for you automatically. No matter how you plan to prepare your return, be sure you are entering the correct information. Incorrect inputs will lead to incorrect outputs, even if the calculations themselves are correct.
4) Credits and Deduction Errors
offered by the IRS include the Earned Income Credit
, the Child Tax Credit
, the Child and Dependent Care Credit
, and more. You may also qualify for itemized deductions
like charitable donations
. Many taxpayers end up missing out on deductions, credits and exemptions that could reduce their tax bill
s. To avoid this, review all tax-saving opportunities
and determine which ones you qualify for before you begin preparing your taxes.
Many taxpayers automatically opt for the standard deduction rather than itemizing their deductions. While it takes more time to itemize, and it requires you to keep detailed records (and receipts), automatically taking the standard deduction
could cost you money if your itemized deductions end up being greater than the standard deduction. If you end up going with the standard deduction but itemizing would have saved you more money, be aware that the IRS will not correct that mistake for you once your taxes are filed. Your best bet is to calculate your itemized deductions to see if they equal more than the standard deduction. Looking at things both ways will allow you to determine which is best for your situation.
The IRS offers an Interactive Tax Assistant
that can help you determine which tax credits or deductions you may be eligible for. Professional tax preparers and tax prep software will also walk you through the process by asking questions to determine your eligibility status.
5) Incorrect Bank Account Information
The fastest way to receive a tax refund or pay any taxes due is through electronic payment
to or from your bank account. Entering the wrong bank account number or routing number when you file your taxes could cause major problems for you. You could incur a late fee if you owe taxes but the IRS can’t retrieve the funds, or it could prevent you from receiving a tax refund
if you are owed one.
For these reasons, it’s very important to correctly enter your bank details on your tax return. Your bank account number and routing number
can likely be found in a few different places. If you have checks, you can find your routing number and account number at the bottom of one of them. The routing number will be on the left and account number on the right. A routing number is universal to your bank so it’s very possible they have it listed it on their website
. Your account number
can usually be found within your online banking platform or mobile banking app, or on bank statements for your account. If you’re unsure whether you have the right bank account information, you should contact your financial institution to verify.
6) Forgetting to Sign
If you’re filing your taxes on paper, you need to remember to sign your return. If you are filing a joint return, remember that both spouses are required to sign. An unsigned return is not valid in most cases, although there are exceptions for members of the armed forces and taxpayers with a valid power of attorney
. There are also rules for special situations such as a joint tax return with a recently deceased spouse
Forgetting to sign a paper return can be avoided by filing your tax return electronically
and using a digital signature. When submitting electronically, you will not be able to submit the return if the digital signature field is left blank.
7) Reporting Incorrect Income Information
Wages, interest, dividends, and other earned income from a W-2
, and other forms are reported to both you and the IRS directly from your employer or financial institution. Make sure that what you enter on your tax return matches exactly with the amounts reported on the forms. If you discover a discrepancy or error
on one of your tax forms, you should contact your employer or financial institution so they can issue a corrected statement. Do not file your tax return with information you know is incorrect.
If you make any of the mistakes listed above, they’ll likely get caught by the IRS
and could delay your filing, trigger a review, or even result in a penalty. If errors are found in your return, you will typically receive a letter in the mail identifying the mistake, along with instructions on how to go about rectifying it. Unfortunately, most errors require you to file an amended return, which could delay any refund you are owed, or leave you at the mercy of interest charges or penalty fees
if it prevents you from paying your tax bill on time.
It is a good idea to always make copies of your tax return for your own records. If you file electronically, keep the e-filing receipt showing that the return has been accepted by the IRS. If you’re sending your taxes by postal mail, you can get a certified receipt
showing when it was sent. This can help you fight claims that you didn’t file your taxes on time
which can result in fees. The IRS recommends keeping copies of your tax returns for a minimum of three years
, although there are some situations where you may want to keep them longer.
While a tax refund is surely always welcome, most of us don’t look forward to the actual process of filing our tax returns. But by giving your return adequate attention to detail, and looking out for these specific common mistakes, you can help spare yourself the headache of an incorrect tax return.