Top Tax Filing Mistakes—and How to Avoid Them

Steer clear of these errors to save money and avoid penalties

Making mistakes on your tax return can cost you money. You may miss out on a larger refund than you claimed, wind up owing more taxes—plus interest and penalties—or invite an audit from the Internal Revenue Service (IRS). The best defense against results like these is a good offense: avoiding errors on your return.

Key Takeaways

  • Make sure that your basic information—such as your name, Social Security number, and filing status—is correct and that financial information is reported on the correct line.
  • Always proofread your tax return and fix any mistakes or typos.
  • Report your financial information exactly as it is reported to the Internal Revenue Service (IRS) on forms such as the W-2, 1099, and K-1.
  • Check to see if taking the standard deduction is better for you financially than itemizing your deductions.
  • Take every write-off to which you are legitimately entitled.
  • Tell the IRS how you want to receive your refund—or, if you owe taxes, pay your bill correctly, so the payment is properly credited to you.

Common Tax Filing Mistakes

Tax laws are complex—the Tax Foundation states that as of 2015 there were over 10 million words of U.S. tax statutes and IRS regulations. Still, even though the rules are complicated, the mistakes that taxpayers make on their returns tend to be fairly simple. Here are 10 of the most common filing mistakes—and what you can do to avoid them.

1. You blow the basics.

Confirm that your name and those of your dependents are spelled correctly and that Social Security numbers are correct. And be sure to select the correct filing status for your situation. If you’re unmarried, for example, you could file as single, but you may qualify for more favorable tax rates and other tax perks if you meet the requirements for being a head of household or qualifying widow(er) with a dependent child. And, under the right circumstances, married couples may pay less tax overall if they file separately rather than jointly. The Interactive Tax Assistant on IRS.gov can help you choose the correct status, especially if more than one filing status applies.

2. You don’t enter information as it has been reported to you (and the IRS).

Wages, dividends, bank interest, and other income you earned that was reported on an information return (W-2, 1099, K-1, etc.) should be entered carefully. These forms have also been reported to the IRS, and the government’s computers are looking for this information to match. If you need to dispute what has been reported to you, contact the business that made the payment (e.g., your employer) and request a corrected form. If you don’t receive a corrected form by the end of February, you can call the IRS at (800) 829-1040 to initiate a Form W-2 complaint.

3. You don’t enter items on the correct line.

Make sure your entries appear where you intend to put them on your tax forms. For example, don’t put your tax-free IRA rollover on the line meant for taxable IRA distributions. Using tax software should help prevent this issue, but always double-check where items appear on your final return before clicking the submit button.

4. You automatically take the standard deduction.

While itemizing requires more effort—and receipts and other proof—than relying on the standard deduction, you could lose money by automatically taking the standard deduction. Check which alternative gives you the greater write-off. Note that the standard deduction nearly doubled as of 2018 under the Tax Cuts and Jobs Act, so itemizing is now less likely to save you money. Still, it never hurts to run the numbers both ways. Most tax software automatically calculates which method is most beneficial to you.

5. You don’t take write-offs that you’re entitled to.

Some may fear that a specific deduction is an audit red flag and shy away from it. There continues to be a belief, for example, that claiming a home office deduction can trigger a tax audit. This is probably not true, especially given that the IRS created a simplified deduction alternative to writing off actual expenses—and that many people are now working from home. As long as you meet tax law requirements for a deduction, it’s wise to take it.

However—and this is a big however—you can now only take a home office deduction if you use the home office because you are self-employed. Employees of companies generally can’t deduct unreimbursed home office expenses as a miscellaneous itemized deduction on Schedule A.

The Affordable Care Act (ACA) individual mandate penalty is no longer in effect as of 2019, but some states still charge one, so find out what your state requires.

6. You forgot your state healthcare individual mandate.

As far as your federal taxes go, the Affordable Care Act (ACA) individual mandate, which required you to pay a penalty fee for every month that you (or your family, if applicable) lacked qualifying health coverage, was eliminated in 2019. However, some states have their own individual health insurance mandate, so be sure you know what your state requires.

As of the 2022 tax year, five states and the District of Columbia have their own individual health insurance mandate:

  • California
  • District of Columbia
  • Massachusetts
  • New Jersey
  • Rhode Island
  • Vermont (does not include a penalty for noncompliance)

7. You don’t check for typos.

It’s easy to transpose a number or leave out a digit—a mistake that can distort the information that you’re reporting. For example, say you contributed $5,200 to your individual retirement account (IRA), but you inadvertently entered $2,500 as the deduction on your return, cheating yourself out of a $2,700 deduction (which costs you $648 more in taxes if you’re in the 24% tax bracket).

Always check the IRS instructions as to whether to use parentheses instead of a minus sign to indicate a negative number.

8. You make math mistakes. 

According to the IRS, math errors are among the most common tax filing mistakes. They can range from basic addition and subtraction to more complex calculations. Always double-check your math, or—better yet—use tax preparation software that does the math for you.

If you have to enter an item as a negative number, check the IRS instructions. Some forms prefer a parentheses, while others use the minus symbol. This ensures that IRS computers read the negative entry correctly. For example, if you want to indicate a loss of $500 on your return, enter it—on the appropriate line, of course—as ($500) and not -$500.

9. You don’t tell the IRS how to handle your refund.

If you overpaid your taxes and are due a refund, be proactive about what you want the government to do with it. If you don’t do anything, the U.S. Treasury will send you a paper check through the mail.

However, to get your refund much faster, add your bank account information (account number and routing number) so that the refund will be deposited directly into your account. Or you can opt to split your refund into as many as three accounts. You can also use it toward next year’s estimated taxes, as contributions to various retirement accounts (e.g., IRAs), or to buy U.S. Treasury marketable securities (e.g., Series I savings bonds). The instructions for Form 8888 explain your options.

10. You make payment mistakes.

If you owe taxes, make sure that your payment is correctly credited to you. Whether filing electronically or by paper, include Form 1040-V with your check. Alternatively, you can pay through the government’s free payment sites (EFTPS.gov or Direct Pay) or by credit or debit card through an IRS-approved payment provider. If you have made an error on your return, amend it using Form 1040-X, Amended U.S. Individual Income Tax Return.

How long should I keep my tax returns?

The Internal Revenue Service (IRS) recommends holding on to your tax returns and supporting documents for at least three years—and up to seven years in certain situations. You should keep your records for seven years, for instance, if you file a claim for a loss from worthless securities or bad debt deduction. If you don’t report income that you should have—and it’s more than 25% of the gross income shown on your return—you should keep your records for six years. Keep your records indefinitely if you do not file a return or you file a fraudulent return.

What are some common tax filing mistakes?

Some of the most common mistakes are missing or inaccurate Social Security numbers, misspelled names, choosing the wrong filing status, math mistakes (addition, subtraction, or using a minus sign instead of parentheses to represent negative numbers), and unsigned forms. According to the IRS, “An unsigned tax return isn’t valid...period.”

Should I claim the standard deduction or itemize?

When you file your tax return, you have the option to take the standard deduction or itemize your deductions. If the value of the expenses you can itemize is greater than your standard deduction, then it makes financial sense to itemize.

What are the standard deduction amounts for 2022?

For 2022, the figures are $12,950 for single and married filing separately taxpayers, $19,400 for heads of households, and $25,900 for married filing jointly taxpayers and surviving spouses.

The Bottom Line

Always be sure to sign your tax return. It’s not valid unless you—and your spouse, if you file jointly—have signed. Keep a copy of your signed return, along with proof of filing (an acknowledgment that your e-filed return has been accepted by the IRS or a certified receipt for a paper return sent by mail). Having this proof helps protect you from any IRS claims that you filed late or not at all. Furthermore, your past tax returns will come in handy when you file future tax returns or need to file an amended return.

Article Sources
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  2. Tax Foundation. "Federal Tax Laws and Regulations are Now Over 10 Million Words Long."

  3. Internal Revenue Service. “Frequently Asked Questions.”

  4. Internal Revenue Service. “Be Tax Ready — Understanding Tax Reform Changes Affecting Individuals and Families.”

  5. Internal Revenue Service. “Publication 587 (2021), Business Use of Your Home.”

  6. Internal Revenue Service. “Individual Shared Responsibility Provision.”

  7. HealthCareInsider. “5 States Are Restoring the Individual Mandate to Buy Health Insurance.”

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  11. Internal Revenue Service. “How Long Should I Keep Records?

  12. Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2022.”

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