11 Big Tax Mistakes to Avoid - NerdWallet (2024)

Mistakes are part of life, but try not to make them part of your tax return. One misstep could hold up your tax return — maybe even your refund — for weeks or months, and you might even end up on the hook for interest and penalties. Here are 12 tax mistakes you definitely want to avoid.

1. Missing the deadline

Never blow off the tax filing deadline. If you have to file after the deadline and are worried about what happens when you file taxes late, know that the IRS is usually fine with that. Just request an extension by filing Form 4868 before the tax-filing deadline and you can get more time.

The alternative — doing nothing — opens you up to a 5% penalty on the amount due for every month or partial month your return is late. The maximum penalty is 25% of the amount due.

You’ll also owe interest on taxes outstanding after the deadline, even if you get an extension. And the IRS may hit you with a late-payment penalty, normally 0.5% per month on the outstanding tax not paid by the filing deadline. Again, the maximum penalty is 25%.

2. Using the wrong Social Security number

The IRS uses Social Security numbers to cross-reference information it receives from you with information it receives about you from your employer, bank or other entities. Transposing a digit in your Social Security number messes that up, which means the IRS could reject your return. So, be sure you enter every Social Security number on your tax return exactly as it appears on the Social Security card.

3. Getting your name wrong

This mistake is easy to make if you don’t use your full legal name every day. It creates a problem because your name on any refund check from the IRS will be spelled the way it appears on your tax return, which could raise a flag at your bank. Be sure to spell the names of everyone on your return just as they appear on their Social Security cards, too. If you’ve changed your name, tell the Social Security Administration. You can also call the IRS to correct the spelling of your name over the phone.

4. Selecting the wrong tax-filing status

Selecting a tax-filing status may seem straightforward, but if you happen to choose the wrong one, it can have a major effect on your entire return. That's because your filing status determines a lot of things, such as how much of a standard deduction you get (if you're not itemizing) and what kind of tax credits and tax deductions you can take. If you're filing with tax software or a tax pro, determining which status to use should be relatively easy; but if you need to brush up, it might be worth reviewing what a tax-filing status is and how to choose the correct one.

5. Forgetting to carry the one

The IRS catches tons of errors on tax returns every year, and in many cases, there was more than one math error per return. These mistakes can become more likely if you’re preparing a paper return by hand. Avoid ruining your refund-fueled daydreams by using tax software, IRS Free File or by hiring a qualified tax preparer.

6. Entering the wrong bank account number

If you’re getting a refund, you’ll probably get it much faster if you choose the direct deposit option. That way it’ll go right into your bank account — unless you give the IRS the wrong account number or routing number.

7. Forgetting to sign your return

An unsigned return is an invalid return in the eyes of the IRS. If you did everything else right, including sending in your payment, the IRS may not ding you for missing the filing deadline because of a missing signature, but you’ll likely need to respond with a signed copy to get things moving again. And don’t forget: Anyone you paid to prepare your return has to sign and provide their IRS preparer tax identification number. If you’re filing jointly, your spouse has to sign, too.

8. Mailing your return to the wrong address

If you’re filling out a paper return, be sure you mail it to the right processing center. Often, returns that include payments go to a different place from returns that don’t have payments. Send it to the wrong center and you’re asking for a processing delay. You can find out here where your return should go. Or you can save yourself the headache and e-file.

9. Leaving out all the backup

If you’re mailing a paper return to the IRS, it's not enough to place your 1040 in the envelope and call it a day. You need to attach all required tax forms, supporting schedules and documents, such as your Schedule A if you’re itemizing and your Schedule D if you’re reporting capital gains and losses. If you forget the backup, you might get a letter from the IRS saying your tax credits or refund are on hold until you fork over the documents. If you’re using software and filing electronically, this part is easier.

10. Making the check out to the wrong entity

If you owe, make the check out to the U.S. Treasury — not “Uncle Sam” or “International Rat Society.” The IRS probably won’t cash it, and then — surprise! — your payment may be late and you'll be hit with a penalty. Alternatively, you can pay online via IRS Direct Pay or use the electronic payment options in your tax software.

11. Scrimping on stamps

Were you trying to save a few cents by using one instead of two stamps on that big, extra-stuffed envelope? Guess what? The U.S. Postal Service will send it back, possibly making your return late, which could cost you far more than 60 cents in interest and penalties. Again, avoid this nightmare by e-filing or at least confirming postage requirements with the Postal Service.

Bonus: Giving up

If you’ve made a mistake on your return, fix it — and fix it fast. Never ignore the IRS. To amend your tax return, get your hands on a Form 1040X, fill it out to fix your error, and get it to the IRS. If the changes involve other schedules or forms, you’ll need to attach them. And if the correction means you owe more taxes, beware: The IRS will assess interest and penalties from the original due date of those taxes.

A lot of things can go wrong at tax time, but like all mistakes in life, try to learn from them. Take the time to understand your tax situation — small changes can save big money, after all.