Posted by Fred Lake

How to Avoid These Top Tax Filing Mistakes

How to Avoid These Top Tax Filing Mistakes

Tax return mistakes are costly. It is best to avoid errors on your return to avoid owing more taxes, interests, and penalties and more importantly to avoid being audited by the Internal Revenue Service (IRS).

10 Common Mistakes to Avoid

1. The basic information is not accurate

Be sure that all basic information is spelled correctly including your name, dependents details, social security numbers, and others. Ensure that you have chosen the correct filing status for your situation.

2. The information you and the IRS reported is inaccurate

You must enter carefully all of the information you received such as wages, bank interest, dividends, and other income information that was reported in W-2, 1099, K01, and others. If there is a mistake in some data, immediately contact the business that handled the payment and a correction must be requested immediately.

 3. The items entered are not on the correct line

Ensure that your entries are on the right line where it is intended to be. For instance, be sure to enter your tax-free rollover on the line intended for it and not on the taxable IRA distributions line.

4. Taking automatically the standard deduction

Automatically taking the standard deductions may be costly for you although itemizing deductions require more effort. Itemizing deductions may likely to save you money if the standard deduction multiplies under the Tax Cuts and Jobs Acts.

5. Not taking write-offs that you are entitled to

Most tax filers fear that when they claim a deduction, it triggers a tax audit. This may not be true knowing the fact that to write off actual expenses, the IRS created a simplified alternative for deductions. It is wise to take the deduction as long as you meet the tax law requirements for it.

It is important to know what state requires the Affordable Care Act individual mandate penalty since it is still effective in some states though it ended in 2019.

6. You did not declare your healthcare individual mandate

Affordable Care Act individual mandate has been stopped since 2019 but in some states, it is still effective. Be sure to know what your state requires in terms of health insurance since some of the states require individuals to have qualifying health coverage. 

7. You Did Not Check For Typo Errors

A very simple mistake can distort the information you are reporting. For instance, instead of entering 5200 dollars to your IRA, you accidentally entered 2500 as your return deduction, there is a difference of 2700 dollars and this is quite a lot. If you are in the 25 percent tax bracket, this error may cost you 675 dollars more in taxes.

8. Using a minus sign with negative numbers

Remember to always use brackets for negative numbers and not a minus sign since the IRS computers can only recognize brackets to signify a negative number.

9. IRS was not informed on how your refund be handled

Be sure to inform the IRS of how you want your tax refunds to be received. If you don’t, you will receive a check. You can get your refund faster if you add bank account information. You can also choose to split your tax refunds. You can either have it as contributions to several accounts or toward next year’s estimated taxes. You can find the explanation for the options in Form 8888.

10. Not Paying Properly

If you have tax balances, be sure that your payment is credited to you properly. Always include with your check the Form 1040-V even if you are filing by paper or electronically. You can make payments through the government’s free payment sites such as or DirectPay or you can use your debit or credit card through an IRS-approved payment provider.

Always ask for proof of filing and keep a copy of your signed return. This will protect you from any IRS claims that you have not yet filed or you filed late. Also, this will help you prepare for your next year’s return filing.

Key Takeaways 

  • Always check your entry before submission. Ensure that you have inputted accurate basic information, as well as the financial information, is reported on the right line. 
  • Your financial information must be reported just like how you report to the IRS using the forms W-2, 1099, and K-1.
  • Assess if it is better for you to take the standard deduction or itemize your deductions.
  • Take every single write-off to which you are legally allowed.
  • Be sure to inform the IRS how you want to manage your refund. If you have unsettled taxes, always remember to pay them as it should be so that your payment is correctly credited to you.
Fred Lake
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