When it comes to filing your taxes, even small missteps can lead to big headaches — like missed refunds, penalties, or even an audit. Here are some of the most common mistakes people make when filing their taxes, and how to avoid them:
- Overlooking Valuable Deductions and Credits
Many taxpayers miss out on deductions or credits they’re entitled to. Be sure to double-check whether you qualify for:
- Contributions to retirement accounts (like IRAs or 401(k)s)
- Education-related expenses
- The Child Tax Credit or Earned Income Credit
These can significantly reduce your tax bill — or increase your refund.
- Not Reporting All Income
It’s not just your main job that counts. Income from side gigs, freelance work, gambling winnings, unemployment benefits, and even certain Social Security payments may need to be reported. Failing to include these can result in underpayment penalties and interest.
- Incorrect or Missing Personal Information
Simple errors — like a wrong Social Security number, incorrect bank account details, or misspelled names — can delay your return or even cause it to be rejected.
- Withholding or Estimated Payments Aren’t Adjusted
Life changes — such as a new job, side income, marriage, or a new child — can affect how much you should be withholding or paying in estimated taxes. If you don’t adjust, you might owe more than you expect come tax time.
- Missed Deadlines and Poor Recordkeeping
Late filing or forgetting required documentation can slow down your return or invite scrutiny. Make sure you:
- File on time (or request an extension)
- Keep tax records, receipts, and documentation for at least three years
- Doing It Alone Without Help
Tax rules change often, and everyone’s situation is different. Using reliable tax software or working with a qualified tax professional can help ensure:
- All income is accurately reported
- You claim all eligible deductions and credits
- You avoid costly errors or overpaying
Bottom Line:
Staying organized, reviewing your return carefully, and getting expert guidance can make tax season a lot less stressful — and a lot more rewarding.
If you have any questions about the topic discussed in this article, or any tax matter, please give us a call at Bononi & Company 724-832-2499.