Common Tax Mistakes to Avoid

✅ How to Avoid:

• Use tax software or professional tax preparers
• Use our calculators to verify your numbers before filing
• Double-check all math, especially when filing paper returns
• Let IRS e-file software catch calculation errors automatically

✅ How to Avoid:

• Verify SSNs against Social Security cards before filing
• Ensure names match exactly what's on Social Security cards
• Update the Social Security Administration if names have changed (marriage, divorce, etc.)
• Never guess or estimate SSNs

✅ How to Avoid:

• Review IRS filing status rules carefully
• Head of Household has specific requirements—verify you qualify
• Consider both Married Filing Jointly and Separately to see which is better
• If divorced or separated, understand which parent claims dependents

✅ How to Avoid:

• Report ALL income, even if you didn't receive a 1099
• Keep track of freelance and cash income throughout the year
• Report cryptocurrency gains, gambling winnings, and tips
• Include unemployment benefits (they're taxable)
• Wait until mid-February to ensure you've received all tax forms

✅ How to Avoid:

• Verify dependents meet relationship, residency, age, and support tests
• Coordinate with ex-spouses on who claims children
• Get IRS Form 8332 if the non-custodial parent is claiming the child
• Remember: only one person can claim a dependent per year

✅ How to Avoid:

• Calculate both ways and choose the higher deduction
• Standard deduction for 2024: $14,600 (single), $29,200 (married)
• Itemize only if mortgage interest, SALT, medical, and charity exceed standard deduction
• Keep detailed records of deductible expenses throughout the year

✅ How to Avoid:

• Research all available credits: Child Tax Credit, EITC, education credits, energy credits
• Earned Income Tax Credit (EITC) is often overlooked by eligible low-income workers
• American Opportunity Credit and Lifetime Learning Credit for education expenses
• Child and Dependent Care Credit for childcare costs
• Use tax software that prompts you to check for credits

✅ How to Avoid:

• Set aside 25-30% of self-employment income for taxes throughout the year
• Make quarterly estimated tax payments to avoid penalties
• Use our Self-Employment Tax Calculator to estimate your liability
• Remember: you can deduct half of self-employment tax on your return

✅ How to Avoid:

• Triple-check routing and account numbers against a check or bank statement
• Ensure the account is in your name (IRS won't deposit to third-party accounts)
• Choose a checking account, not savings (some banks reject refund deposits to savings)
• Don't close your bank account before your refund arrives

✅ How to Avoid:

• File for an automatic 6-month extension (Form 4868) if you need more time
• Remember: an extension to file is NOT an extension to pay—you still owe taxes by April 15
• Set reminders well before the deadline to avoid last-minute rush
• If you owe taxes and can't pay, file anyway to avoid failure-to-file penalties

✅ How to Avoid:

• Check your state's filing requirements—most states require returns
• If you moved, you may need to file part-year returns in both states
• Use our State Tax Calculator to estimate state taxes
• Some states have reciprocity agreements—research your situation

✅ How to Avoid:

• Keep all tax documents for at least 3 years (7 years for serious issues)
• Save receipts for deductible expenses: medical, charity, business, etc.
• Maintain digital or physical copies of W-2s, 1099s, and all tax forms
• Use accounting software or spreadsheets to track income and expenses throughout the year