Avoid Tax Season Pitfalls: Common Mistakes to Watch Out For

(Important:  This article is for informational purposes only and is not intended as tax, legal, or accounting advice.  Rivers Edge Bank always recommends seeking assistance from tax professionals for any questions you may have.)

Tax season can feel overwhelming, but it doesn’t have to be. Taking a proactive approach to your tax filing process can reduce stress, save money, and help you avoid costly errors. By learning how to sidestep common tax filing mistakes, you’ll set yourself up for a smoother and more successful experience.

Let’s explore some of the most frequent tax filing pitfalls and how to avoid them, ensuring your finances stay on track this tax season.

Why Tax Mistakes Matter

Even small errors on your tax return can create big headaches. Mistakes can lead to delays, audits, or penalties that impact your financial health. Here’s why accuracy is essential:

• Delayed Refunds: Errors or missing documents can cause processing delays, keeping you from receiving your refund on time.
• Audits: Filing mistakes may trigger an IRS audit, which can be stressful and time-consuming.
• Penalties and Interest: Incorrect filings or missed deadlines can result in fines or interest charges, making tax season even more expensive.

By avoiding these issues from the start, you’ll save time, money, and stress—and you’ll keep your financial goals within reach.

Top Tax Filing Mistakes to Avoid

Understanding common filing errors can help you take the necessary steps to prevent them. Here are some of the most frequent missteps taxpayers make—and how to steer clear of them.

1. Choosing the Wrong Filing Status

Your filing status plays a big role in determining your tax liability or refund. Selecting the incorrect status can lead to overpaying or underpaying taxes.

• Review the different filing statuses (single, married filing jointly, head of household, etc.) and choose the one that accurately reflects your situation.
• Use the IRS’s Interactive Tax Assistant tool for guidance.

2. Missing Out on Deductions and Credits

Deductions and credits can significantly reduce your tax burden, but many taxpayers miss them due to a lack of awareness.

• Research deductions like charitable contributions, medical expenses, and mortgage interest.
• Explore credits for education, energy efficiency, or childcare expenses. Visit the IRS Credits & Deductions page for a full list of potential tax savings.
• Keep records of eligible expenses throughout the year to maximize your tax benefits.

3. Claiming Ineligible Deductions or Credits

While it’s important to claim all applicable deductions and credits, claiming those you’re not eligible for can result in penalties.

• Double-check the eligibility criteria for each deduction or credit.
• Consult a tax professional or review resources from the IRS if you’re unsure about what you qualify for.

4. Math and Calculation Errors

Math mistakes can throw off your entire tax return. Even small miscalculations can lead to discrepancies in your refund or tax liability.

• Use tax software to automate calculations and reduce errors. Explore IRS Free File to access free tax software for eligible individuals.
• Review all figures carefully before submitting your return.

5. Providing Inaccurate Information

Incorrect Social Security numbers, income details, or banking information can delay your return or refund.

• Double-check all personal and financial details before filing.
• Ensure your direct deposit information is accurate to avoid refund delays.  Find out Rivers Edge Bank's routing number. 

6. Filing Too Early or Too Late

Timing is everything during tax season. Filing too early without all required documents can lead to incomplete submissions, while filing late may result in penalties.

• Wait until you have all necessary forms, such as W-2s or 1099s, before filing.
• Mark tax deadlines on your calendar and file on time to avoid late fees.

Tips for a Smooth Tax Season

Want to avoid these common mistakes? Follow these best practices to make tax filing easier and more efficient:

1. Gather Your Documents Early

Start organizing your tax documents well before the deadline. Keep all W-2s, 1099s, receipts, and other relevant forms in one place.  If you need to download your account history or statements, log into Online Banking to see your options.

• Use a filing system to keep records organized throughout the year.
• If you plan to itemize deductions, ensure you have documentation for all eligible expenses.
• Learn about required forms and documentation on the IRS Forms and Instructions page.

2. Use Tax Software or Hire a Professional

Tax software can simplify the filing process by automating calculations and flagging errors. Alternatively, a tax professional can provide personalized advice and ensure your return is accurate.

• Choose software with features tailored to your needs, such as deduction tracking or audit protection.
• A professional tax preparer can guide you through complex situations, such as self-employment taxes or investment income. Use the IRS Directory of Federal Tax Return Preparers to find a qualified preparer near you.

3. Review Your Return Carefully

Before submitting your tax return, double-check everything—from personal details to calculations.

• Use a checklist to verify all entries are accurate and complete.
• Ensure all forms and supporting documents are included.
• For additional help, refer to the Taxpayer Advocate Service if you encounter issues or need assistance.

4. File Electronically

Electronic filing is faster, more reliable, and less error-prone than paper filing. Plus, it speeds up the refund process. Learn more about IRS e-File options.

Stay Organized Year-Round

The best way to simplify tax season is to stay on top of your finances all year. Maintain organized records, stay informed about tax law changes, and regularly review your financial situation. By adopting these habits, you’ll be well-prepared when tax season rolls around.

Confidently Conquer Tax Season

Avoiding common tax filing mistakes isn’t just about saving time—it’s about protecting your financial health. By understanding the pitfalls and taking proactive steps to prevent them, you can file with confidence and achieve a stress-free tax season.

If you’re unsure about any aspect of the process, don’t hesitate to consult a tax professional. A little guidance can go a long way toward ensuring your return is accurate and error-free.

Ready to tackle tax season like a pro? Start organizing today and take control of your finances!