Common Tax Errors and How to Avoid Them

The prospect of making a mistake on your tax return can be pretty intimidating. Major errors could lead to penalties or even an audit, which is never enjoyable.

However, there’s a silver lining: most of the common mistakes are straightforward to fix. Let’s explore what these mistakes are and how to steer clear of them—or rectify them if they occur.

It’s crucial to be aware of frequent, avoidable errors when filing your federal tax return.

While it’s not inherently bad to file early, doing so before receiving all necessary documents can substantially increase your chances of making mistakes.

Even a basic tax return, which typically only involves a Form W-2, should not be submitted before the January 31 deadline—when employers are required to send out these forms. For this year, that deadline was actually February 2nd.

More complex returns often require additional waiting time. Many 1099 forms, used for reporting self-employed income, may not arrive until mid-February.

Filing before you have all your documents can result in under-reporting your income. This not only raises your risk of receiving an audit from the IRS but also increases the potential for underpayment penalties.

To avoid this mistake: Wait until you’ve received all documentation before submitting your return. W-2s and 1099s need to be sent by mid-February.

2. Inaccuracies and Typos

When preparing your returns manually, it’s easy to make errors. From misspelling your employer’s name to incorrectly calculating deductions, these mistakes can delay your return’s processing or even lead to rejection, forcing you to refile.

A common error involves mismatching names with Social Security numbers. Ensure that all names and Social Security numbers are entered exactly as they appear on the SSN card. If you’re used to writing your name differently, it’s easy to slip up.

To avoid this mistake: Double-check everything—names, Social Security numbers, employer details, and calculation accuracy. Using tax preparation software, like TurboTax or H&R Block, may also help, as these tools provide prompts and can sometimes upload documents automatically. Just verify that everything is accurate.

Your filing status has a significant effect on which credits you can claim, what forms you need, and whether you might owe a refund or taxes.

There are five different statuses, and you can only choose one. But it can be a bit tricky if you qualify for multiple options.

For instance, married individuals can opt to file jointly or separately. Plus, single taxpayers with dependents should consider whether to file as single or as head of household.

Choosing the wrong filing status could lead to higher taxes, which is the last thing anyone wants.

To avoid this mistake: Take all factors into account when deciding on a status. Usually, married couples benefit the most from filing jointly.

Read more: How to choose the appropriate tax filing status

Changes to deductions and credits set for 2025 may also catch you off guard, leading to significant mistakes in your tax returns. Here are a few things to watch for:

Learn more: Best tax credits to claim this year

To avoid this mistake:

• Research thoroughly to find credits and deductions that might lower your tax bill.

• Decide on using the standard deduction versus itemizing. The standard deduction has increased, so it might not make sense to itemize as you once did unless you can maximize available deductions like the new SALT deduction.

• Leverage tax software to ask you the right questions about qualifying deductions.

• Consider hiring a tax professional to help navigate complex tax laws.

Direct deposit remains the quickest way to receive your tax refund. But if your banking details are incorrect, you could face delays.

This is increasingly important, as the IRS is moving away from issuing paper checks.

If your account information isn’t right, the bank might reject your refund, or the IRS might mistakenly credit it to the wrong account, leading to significant delays.

To avoid this mistake: Always double-check your banking details before opting for direct deposit. If you’re mailing your tax return, ensure all numbers are accurate to avoid refund delays.

Learn more: Where is my tax refund? How to check the status of your refund in 3 steps.

The tax deadline for most individuals is April 15th. Missing this deadline can complicate your ability to file, especially if you owe taxes, potentially leading to fines.

If you anticipate needing more time, you can ask for an extension, but this has to be done by the tax deadline to avert penalties. In some situations, like being overseas or affected by a natural disaster, extensions may be granted automatically.

Bear in mind, extensions don’t give you extra time to pay taxes; they just allow you more time to file. If you believe you’ll owe taxes, it’s wise to make that payment by April 15th to avoid interest and penalties.

To avoid this mistake: Request an extension and pay any estimated taxes. If you’re feeling overwhelmed, tax software or a tax professional can ease the burden of preparing your return, helping you dodge penalties for late filing.

Read more: How to apply for a tax extension from the IRS

Ignoring tax withholding—which determines how much of your paycheck is reserved for taxes—can either result in a large refund or an unexpected tax bill.

If too much tax is withheld, you might receive a sizable refund at the end of the year, but that money could have been better used throughout the year for bills, savings, or investments.

On the flip side, withholding too little may leave you owing money to the IRS. The goal is to adjust withholding to get your refund as close to zero as possible; this often requires updating your W-4.

To avoid this mistake: Review your W-4 withholding levels annually and make adjustments as needed. Using tools like the IRS Withholding Estimator can be very helpful.

Learn more: This year’s tax refund amount is even larger. Why that’s not good news for taxpayers.

By following these guidelines, you can actively avoid common tax pitfalls while preparing your return.

• Know your deadlines: Keep an eye on not only the tax filing deadline but also when essential documents are expected to arrive.

• Triple-check your info: If entering details manually, take extra care to mitigate errors; always cross-verify what you’ve filled in.

• Utilize IRS tax tools: Tools like the IRS Interactive Tax Assistant can help with selecting the right filing status, tax credits, and necessary forms for your return.

• Request an extension if needed: That gives you an additional six months to file. Remember, if you owe taxes, they need to be paid by the April deadline.

• Use electronic tax filing software: Online platforms like TaxAct, H&R Block, and TurboTax can significantly help reduce mistakes.

• Consult a tax professional: If you’re uncomfortable diving into the intricacies of your tax return, a professional can guide you.

If you find yourself having made a mistake, you can rectify it by submitting an amended return.

To amend your tax return, complete Form 1040-X along with any additional affected tax forms.

You can file your amended return electronically unless the original one was paper-based. Be sure to verify this before proceeding.

Read more: How to submit an amended tax return

The IRS has identified multiple common tax errors, ranging from trivial issues like misspellings to more consequential mistakes involving wrong Social Security numbers or miscalculated credits. For additional tips, you can check the IRS checklist to help prevent these common pitfalls.

Don’t overlook vital deductions like charitable contributions, student loan interest, and state or local tax deductions. Some recent tax changes may also be easily missed, underscoring the need for diligent awareness.

Correcting errors on your filed return is possible by submitting an amended return. Just remember to complete Form 1040-X and any other impacted documentation. Additionally, without a paper filing for your original return, you may file electronically.