Introduction
Filing your taxes may seem straightforward, but small mistakes can lead to missed refunds, penalties, or even IRS notices. At Tax Ten Forty, we’ve seen how simple errors can cost taxpayers hundreds—or even thousands—of dollars. Whether you’re filing a basic return, running a small business, or working across multiple states, avoiding these common mistakes can make a big difference.
1. Missing Deductions and Credits
One of the most common mistakes is failing to claim all eligible deductions and credits.
Many taxpayers overlook:
- Earned Income Tax Credit (EITC)
- Education credits
- Business expenses (for Schedule C filers)
👉 Even small missed items can significantly reduce your refund.
2. Poor Recordkeeping (Especially for Schedule C)
If you’re self-employed, recordkeeping is everything.
Common issues include:
- Not tracking mileage 🚗
- Mixing personal and business expenses
- Estimating expenses without documentation
👉 Good records protect you in case of an audit and help maximize deductions.
3. Incorrect Filing Status
Choosing the wrong filing status can lead to:
- Higher tax liability
- Missed credits
- IRS delays
For example, Head of Household status has specific requirements that are often misunderstood.
4. Not Reporting All Income
The IRS receives copies of your income forms (W-2s, 1099s). If something is missing from your return, it can trigger a notice.
This includes:
- Gig work (Uber, Lyft, DoorDash)
- Side jobs
- Online sales
👉 Even if you didn’t receive a form, the income may still be taxable.
5. Filing Without Understanding Multi-State Rules
This is especially important for:
- Military personnel
- Remote workers
- Individuals who moved during the year
Each state has different rules, and filing incorrectly can result in double taxation or penalties.
Conclusion
Avoiding these common mistakes can help you keep more of your money and reduce stress during tax season. Tax laws are constantly changing, and every situation is different—that’s why working with a knowledgeable preparer can make all the difference.