We’re just a few days away from America’s official Tax Day. By April 16th, about 95% of accountants handling tax compliance are gearing up for a well-earned two-week break to celebrate the end of another taxing season.
But not everyone relies on a professional to file their taxes – and even when they do, mistakes still happen. Trust me, I’ve made some of the very ones I’m about to share with you. Let’s review them so your filing process is as smooth as possible.
Tax season is stressful enough without making a mistake that could delay your refund… or worse, trigger an IRS audit. Yet, every year, thousands of business owners and individuals make simple errors on their returns that cause unnecessary headaches. The good news? These mistakes are easy to avoid if you know what to look for.
Here are five of the most common tax return mistakes and how to prevent them.
Misspelling Your Own Or Spouses Name
It might sound ridiculous, but something as small as a typo in your name can cause the IRS to reject your tax return. This typically happens when your name doesn’t match what’s on file with the Social Security Administration (SSA). If you recently got married or changed your name and haven’t updated the SSA, the IRS may not recognize your return. Even a simple mistake like an extra letter or missing middle initial could cause an issue.
How to avoid it: Double-check the spelling of your name exactly as it appears on your Social Security card before submitting your return. If you’ve recently changed your name, update your records with the SSA as soon as possible.
A client recently asked me to review one of his tax returns… right before an IRS notice landed in his mailbox. After digging into the issue, I discovered that his wife had never updated her maiden name with the Social Security Administration, even though she had obtained a driver’s license under her new name. Fortunately, this was a quick and easy fix, but if we hadn’t caught it in time, it could have turned into a costly mistake.
Entering the Wrong Social Security Number
Your Social Security number (SSN) is how the IRS verifies your identity and ties your income to your tax records. Entering an incorrect SSN, even if it’s just one wrong digit, could lead to a rejected return or delays in processing.
How to avoid it: Carefully enter your SSN and cross-check it against your Social Security card. If you’re filing a joint return or claiming dependents, verify all SSNs before submitting.
Making Math Errors
A simple miscalculation can throw off your entire tax return. The IRS processes millions of returns every year, and one of the most common reasons for rejection is basic math errors. These include incorrect addition or subtraction, failing to carry numbers correctly, or misreporting figures from W-2s, 1099s, and other tax forms.
How to avoid it: Use tax preparation software or work with a tax professional to ensure accuracy. If you’re filing manually, double-check every calculation and compare numbers to your official tax documents.
“Fat-fingering” your return in one thing. However… I cannot tell you how many times a client has uttered the words:
“I do not have any more income and I did not have any 1099s this year.”
As you may have already guessed, this becomes a massive problem down the line. The IRS cross-references all W-2s and 1099s to make sure they are accounted for both on the sender and receiver end. The best way to avoid this dilemma – is to pull your Wage and Income transcripts. By doing so, you’ll be able to review all 1099s and other income items to see what the IRS is expecting from you and your return.
Forgetting to Sign Your Return
An unsigned tax return is like a blank check – it won’t be processed. This mistake is especially common for those who still mail in paper returns. If your return is missing a signature, the IRS considers it invalid and will not process it until you fix the issue, which could delay refunds for weeks.
How to avoid it: If filing a paper return, always check for signatures before mailing. If filing electronically, use an electronic signature (e-file PIN or adjusted gross income from a prior year) to verify your identity and sign digitally.
Incorrectly Claiming Tax Credits and Deductions
OK, now this is a big one. Not just because this is easy to mess up, but mistakes often lead to hefty penalties and can be very costly. Tax credits and deductions can significantly lower your tax bill, but claiming the wrong amount, or claiming credits you don’t qualify for, can lead to problems. A frequently scrutinized credit is the Child Tax Credit, which the IRS audits heavily due to frequent errors. Business owners also often miscalculate deductions for home offices, business expenses, and depreciation.
How to avoid it: Carefully review the eligibility requirements for credits and deductions before claiming them. If unsure, consult a tax professional to avoid costly mistakes.
The Cost of Fixing Mistakes
Fixing these simple errors can be time-consuming and expensive. An incorrect SSN or a missed signature could delay your refund for weeks. Math errors or incorrect deductions could lead to an IRS audit, requiring additional documentation and, in some cases, penalties and interest. Taking the extra time to review your return before submitting it can save you from unnecessary stress and financial loss.
The best way to ensure your tax return is error-free is to work with a tax professional who can help you navigate the complexities of tax laws and ensure everything is filed correctly the first time.
Welcome to the New Age of Accounting. Let’s begin.
Chris is the Managing Partner at Weston Tax Associates, a best-selling author, and a renowned tax strategist. With over 20 years of expertise in tax and corporate finance, he simplifies complex tax concepts into actionable strategies that drive business growth. Originally from Sweden, he now lives in Florida with his wife and two sons.
