Everyone can make mistakes, but when it comes to improperly filing taxes, the following mistakes could end up costing you some serious money.

Although the U.S. tax code holds a lot of information most taxpayers don’t know enough of, the truth is most of the mistakes that come when filing your taxes can be easily avoided. Read on to find out what they are and how you can save yourself from making these mistakes next time.


Common Mistakes When Filing Your Taxes

#1 – Not filing Taxes On Time

When it comes to taxes and the IRS, procrastinating isn’t really an option. Although it can be tempting to leave this task to the last minute, the closer to the deadline you start compiling your information, the closer you are to missing it if you happen to run into any problems while completing your forms.

In these cases, filing an extension will give you more time but you’ll still need to pay any taxes owed or else the IRS will charge you a considerable interest rate.


#2 – Entering Data Wrong

Entering wrong social security numbers, names or even bank account information are some of the most common mistakes when filing taxes. Also, an unsigned tax return will be about as valid as an unsigned check.

Avoid these mistakes by double checking every piece of information you enter into your tax form before sending it or using a tax software program that can flag these sorts of errors.


#3 – Using the Wrong Filing Status

There are five different filing statuses on a federal tax return and they all depend on several factors, such as your marital status or whether you can claim a dependent. According to each filing status, the IRS applies different income tax rates and standard deductions.

If you’re not sure which category you fall into, the IRS Interactive Tax Assistant can help you figure it out.


#4 – Errors in Figuring Credits or Returns 

A lack of understanding and not keeping accurate records can cause you to make common tax mistakes.

If you moved to a new city for a job, for instance, you could write off some of the moving expenses. Sure, not everyone has to file a tax return, but it is still in your best interest to do it anyway since the IRS only issues refunds to those who do.

Also, many tax filers make mistakes while figuring their Earned Income Tax Credit or forget to deduct their IRA contributions. Take the time to check the credits and deductions you’re eligible for so you don’t end up losing money in the long run.


#5 – Forgetting to Report Income

Even if it’s just an occasional gig, the IRS needs to know about all your sources of income last year, from gambling winnings to retirement withdrawals or that time you briefly tried to be an Uber driver. Unclaimed income could cost you some major penalties.


#6 – Math Mistakes

Take your time to carefully review and enter your data since calculation errors are one of the most common mistakes when filing taxes. Many online software programs are available to do the math for you or, you can always hire a professional consultant to do it for you.


#7 – Not Seeking Help When Needed

Although many people have very simple tax filings that do not require special assistance, this may not be the case for everyone.

If you’ve received tax documents recently that you don’t really understand, or if your situation changed substantially from one year to another, then it may be safe for you to hire the help of a tax professional.

A tax professional can help you with tax planning advice for the upcoming year or even help you understand tax code better so that you can take advantage of valuable benefits you may have overlooked.


Avoid making any tax mistakes that may end up putting you at financial risk by contacting Mitchell Advisory Company today.