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Filing taxes can be tricky, and common mistakes may lead to penalties or delays. Errors like incorrect calculations, missing deductions, or late submissions can impact your returns. Understanding these frequent tax filing mistakes and how to avoid them ensures a smooth, hassle-free process. Stay informed and file accurately to maximize your refund and stay compliant with tax regulations.
Tax season has arrived, and millions of Americans are submitting their returns, many hoping for a refund. However, some will experience delays due to filing mistakes.
In 2024, the IRS reported approximately 2.7 million returns contained mathematical errors.
While some mistakes are simple to fix, others can lead to lost deductions, interest accrual, or financial penalties.
Before filing, it’s crucial to have all necessary paperwork. If you’re unsure which forms you need or are missing some, you’re not ready to submit your return.
According to CPA Luis Rivero Vazquez, one of the most frequent errors is attempting to file without gathering all required documents.
Ensure you have all essential forms, such as W-2s from every employer in 2024 and any 1099s related to freelance work, unemployment benefits, retirement accounts, or investments.
Don’t overlook less common forms like Form 5498-SA, which reflects health savings account contributions.
Missing critical financial details - like cryptocurrency earnings or small investment sales - could lead to underreported income, additional filing time, or even penalties.
Mathematical mistakes are among the most frequently flagged issues by the IRS, ranging from basic arithmetic errors to incorrect deduction calculations.
If you discover a miscalculation after submission, you may be able to file an amended return. However, if the IRS identifies an underpayment, you’ll likely be required to pay the difference, plus any accumulated interest.
To reduce the risk of calculation errors, tax software like H&R Block and TaxAct can automate the process and help ensure accuracy.
Your tax filing status determines your eligibility for deductions and how your return is processed. The IRS recognizes five categories:
Selecting the wrong status can impact your tax liability. If you’ve recently experienced a life event such as marriage or divorce, verify your correct status before filing.
One of the most common mistakes taxpayers make is errors in claiming the child tax credit.
For 2024, this credit is worth up to $2,000 per dependent under 17, but it begins phasing out for individuals earning over $200,000 and couples earning over $400,000. The refundable portion, known as the additional child tax credit, can provide up to $1,700, even for those who owe no taxes.
To qualify, a child must:
Using tax preparation software can help ensure accuracy and prevent errors when claiming credits.
In 2024, the Earned Income Tax Credit offers up to $7,830 for families with three or more children, while eligible individuals without children may receive up to $632.
New parents can claim the child and dependent care credit, worth $3,000 for one child and $6,000 for two or more, to offset childcare costs.
For those itemizing deductions, keeping records of property taxes, mortgage interest, and medical expenses exceeding 7.5% of adjusted gross income is essential.
Some deductions, such as student loan interest, don’t require itemization and can be claimed separately.
Tax Day on April 15, 2025, isn’t just the deadline for filing - it’s also the last chance to contribute to an IRA and have it count for the 2024 tax year.
The maximum IRA contribution is $7,000, with an increased limit of $8,000 for individuals aged 50 and older.
Similarly, contributions to a health savings account (HSA) are tax-advantaged. For 2024, individuals with self-only coverage can contribute up to $4,150, while those with family coverage can contribute up to $8,300.
Even if all calculations are accurate, simple data entry errors can cause complications. Mistyping a Social Security number, incorrectly reporting dependents, or making a mistake in reported income can delay processing.
Taxpayers should review every detail carefully, especially when listing deductions such as charitable contributions, medical expenses, and estimated tax payments.
If you expect a refund but don’t supply bank account details, the IRS will issue a paper check, which can take six to eight weeks to arrive.
By opting for direct deposit, refunds can be processed in as little as 21 days. Some tax preparation services, like TurboTax, offer options to receive funds even faster through specific financial institutions.
Once a tax return is completed, it must be signed, either digitally or in print. If filing jointly, both spouses must sign.
An unsigned return is considered invalid and won’t be processed.
Rushing through the final steps can also result in missed errors. Take a moment to review the return and verify that the refund amount aligns with expectations. If discrepancies arise, it’s important to investigate why.
Before considering the process complete, taxpayers should confirm receipt by the IRS.
Verification can be done through tax software, an online IRS account, or the "Where’s My Refund" tool.
Once confirmation is received, taxpayers can relax - until next year’s tax season arrives.
For questions or comments write to writers@bostonbrandmedia.com
Source: CNBC
