No one is perfect, but it’s in your best interest to be as close as possible when filing your taxes.
That’s because the IRS is not known for being very forgiving, so even the smallest of mistakes can result in costly consequences.
Maybe you can’t afford for a CPA to do your taxes. Maybe you’ve never encountered problems before. Or, maybe you just have lots of things on your mind and forget to dot your “I’s” and cross your T’s.
Well, TaxRise is here to help.
Below, you’ll find what we consider the five most common blunders made by taxpayers today — those most likely to turn your post-filing spring fling into a stack of IRS letters and frantic phone calls.
Take our word for it: You don’t want that to happen. We hope that by bringing these to your attention, we can help you avoid making them.
1. Report Every Cent, Even Measly Jury Duty Pay
If you made money, the IRS wants to know about it. Period. That means not just from your 8 a.m.-5 p.m. job. You must reveal your side gigs, your reward from that trivia contest, even that hidden undersea treasure you found. The IRS gets the same copies of W-2s, 1099s, etc. that issuers send to you — so pleading a case of amnesia won’t cut it. Mismatches trigger automatic IRS notices and can lead to audits, penalties for underreporting, and extra tax owed.
Solutions
- Examine every form you receive — W-2, 1099, royalty checks, whatever.
- Keep a file for every bit of money (yes, even that $50 for dog-sitting).
- If someone paid you under the table, don’t stick your head under it — good records will save you grief later.
2. Beware of Mixing Business With Pleasure
Sure, that trip to Las Vegas was technically a business trip. But unless you can prove it, the IRS will see straight through your creative expense claims. Big donations, suspicious business write-offs, or calling your living room an “executive office”? All will raise red audit flags and audit risk. Unsubstantiated claims may be denied, leading to unnecessary penalties and interest.
Solutions
- Keep all receipts, no matter how small.
- Don’t stretch the truth. If it feels fishy, the IRS will probably sniff it out.
- If you’re not sure, ask a professional; but remember, the buck stops with you.
- Real donations require real receipts. Good intentions don’t count.
3. No Time Like the Present
Tax Day is like a snowstorm — you know it’s coming, but how bad or good it will be is a mystery. If you happen to skip filing completely, file late without requesting an extension, or forget to include a key form, penalties will start immediately and only snowball from there. The IRS doesn’t care if your computer crashed or the dog ate your forms. Late filers face an automatic penalty (5% per month late, up to 25%) and interest. Early filers may have to file amendments if changes warrant them.
Solutions
- When you e-file, mistakes nearly disappear. Plus, you get instant confirmation, and you can do it all from the comfort of your home and cozy pajamas.
- If you need extra time, ask for an extension. However, don’t forget to actually pay by Tax Day. The IRS does not offer grace on that.
- Mark Tax Day on the calendar, set a phone reminder, tie a string around your finger, or do whatever prevents you from forgetting.
4. Claiming the Wrong Status
Choosing the wrong filing status on your tax return is one of the most common — and potentially costly — mistakes taxpayers make. Each filing status comes with distinct tax brackets, deductions, and eligibility for tax credits.
Claiming “Single” when eligible for “Head of Household”: Many filers fail to realize that supporting a dependent and maintaining a home may qualify them for Head of Household, which offers better tax rates and a higher standard deduction. If you claim “Single” in error, you may wind up paying more taxes than necessary. On top of that, the IRS may put a hold on your return while verifying your status or dependent claims, causing refund delays.
Checking “Married Filing Separately” instead of “Married Filing Jointly”: This may be done by mistake, or to purposely avoid a spouse’s tax issues. It can often result in loss of credits (e.g., Earned Income Credit, Child Tax Credit) and higher overall tax.
Selecting “Head of Household” without meeting requirements: Some claim this status hoping for a better refund without actually qualifying (not supporting a dependent for more than half the year). Prepare for IRS audits as a result.
Solutions
- Carefully review IRS definitions before choosing a filing status.
- Use IRS online tools or tax software to see what’s best for your situation.
- Amend a return promptly if you used the wrong status. Filing Form 1040-X can help prevent larger issues later.
5. The Easy Fixes: Don’t Make It Harder Than Needed
Leaving out a digit of your Social Security number and misspelling your last name are two common oopsies, and both will put you on the IRS’s radar. Mistakes like these can also delay your refund or trigger threatening letters. The IRS will correct basic math errors, but you might see a smaller refund, or the IRS may send a notice that you owe more. Repeated mistakes can trigger further review. Typos or using a nickname can cause mismatches with IRS records. Returns can be rejected, refunds delayed, and credits (like for dependents) denied until corrected.
Solutions
- Double-check those numbers, especially Social Security, bank accounts, addresses, date of births, etc.
- Review every line before you hit submit or lick that envelope.
- Again, e-filing really is your friend.
- Calculate honestly. Don’t just estimate if you don’t know.
It’s a Wrap!
If you want to keep tax season drama-free, keep accurate and honest records, never let a deadline sneak up, pay what’s due, and don’t let the little stuff trip you up.
Now, if you do get an IRS notice, don’t panic, and certainly don't ignore it. Respond quickly and clearly. That’s how to speed up a refund, and more importantly, keep those folks at the IRS happy and out of your hair.
And if you’re on the verge of pulling out that one last hair on your head, TaxRise can help.
