8 Costly Tax Errors To Avoid While Filing Your Personal Taxes

By NexGen Support Team

November 4, 2022

Navigating Individual Tax Filing: Common Errors to Avoid for a Smooth Process

Filing your taxes as an individual can seem very easy. However, a lot of little details can slip by depending on your due diligence. Here are 8 common tax filing errors committed by people while filing their taxes.

1. Missing/Incorrect Details

A lot of missing or incorrect details go unnoticed when people file their tax reforms. People often forget to file entire forms depending on their tax bracket, their assets, and investments. Some of the details inaccurately or entirely left out of tax forms include:

  • Missing or Inaccurate Social Security Numbers: Each SSN on a tax return should appear exactly as printed on the Social Security card.
  • Misspelled Names: A name listed on a tax return should match the name on that person’s Social Security card.
  • Missed forms: 1099 forms for Interest and Dividends on the accounts, even the accounts that you didn’t actively trade in, needs to be added to your filing

2. Incorrect Filing Status

Certain taxpayers choose the wrong filing status for their filing. At times, more than one filing status applies to you. Figuring this out can be challenging as the Tax laws change from time to time. If you are in doubt, reach out to our team of tax experts to help you figure out your tax filing status.

3. Mathematical Errors

The most common errors are often mathematical mistakes which can range from addition and subtraction to more complex operations. Taxpayers often double-check their math, but it’s better to have software do it automatically for you.

4. Unsigned Forms

Unsigned tax returns are invalid. If you are filing a Join Tax Return with your Spouse, your spouse also needs to sign the joint tax return. Some exceptions do exist, like for members of the armed forces, and those taxpayers who have a valid power of attorney. The best solution is to file returns electronically and use a digital signature.

5. Figuring Credits or Deductions

Did you know that one of the most common mistakes tax filers make while filing their taxes is figuring out things like their Earned Income Tax CreditChild, and Dependent Care CreditChild Tax Credit, and Recovery Rebate Credit? This can be a pain if you’re owed some deductions and want to collect. More importantly, if you don’t use these credits correctly, you will get the dreaded letter from the IRS. Having a streamlined tax filing service for individuals can cut down on such errors. If you are in doubt, reach out to our team of tax experts to help you figure out the tax credits and deductions you are entitled to

6. Using an Expired ITIN (Individual Tax Identification Number)

Many tax filers use ITIN instead of SSN to file their taxes. However, some of the ITINs series issued previously have expired. It’s quite common for tax returns to be filed using an invalid or expired tax identification number (ITIN). Taxpayers can renew their ITIN number while filing their tax return

7. Filing Too Early 

While taxpayers should not file late, they also should not file prematurely. People who don’t wait to file before they receive all the proper tax reporting documents risk making a mistake that may lead to a processing delay.

8. Incorrect Bank Account Numbers.

Taxpayers who are due a refund should choose direct deposit. This is the fastest way for a taxpayer to get their money. However, taxpayers need to make sure they use the correct routing and account numbers on their tax returns.

During tax filing season, IRS is usually backlogged. If you have committed one of these errors, your tax file will get stuck in that backlog. The much-awaited tax refund you were looking forward to will be delayed. So don’t commit these common mistakes. Better still, use one of the Tax Software to compute your taxes or reach out to our tax experts to help you file your taxes.