20 Common Tax Filing Mistakes for Families
Families can feel stressed when they have to file taxes because there are so many deductions, credits, and papers to keep track of. Mistakes can cause delays, fines, or missed chances to get refunds.
- Tricia Quitales
- 7 min read
People with kids often find tax season very stressful, and even small mistakes can have a big effect on their tax returns. When families file their taxes, they often make a number of mistakes, such as forgetting to claim some deductions or filing their taxes under the wrong status. In this article, 20 of the most common mistakes are listed. These will help you avoid mistakes that cost a lot of money and make sure you file your return correctly. Families can save time, feel less stressed, and get the most out of their tax refunds if they know about these mistakes.
1. Not Claiming the Correct Filing Status
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Choosing the wrong filing status could change your tax rate and your ability to get some credits. A lot of families forget about the “Head of Household” status, which lets single parents get a bigger tax break. Know your choices and pick the one that will help you the most.
2. Forgetting to Include All Income
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Some ways to make money, like freelance work or side jobs, are easy to forget. You could face fines or an audit if you don’t report all of your income. Double-check all your forms, like W-2s, 1099s, and other records, to ensure you report your income.
3. Missing the Child Tax Credit
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The Child Tax Credit is one of the best tax breaks for families, but many don’t get it because they don’t know how to figure it out. Make sure you know what you need to do to get this credit and only claim it if you do. This credit can either lower the tax you have to pay or increase the money you get back.
4. Incorrectly Claiming Dependents
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A child can only be claimed by one person at a time. If both parents file separately, it can cause problems or disagreements. Make sure everyone knows who will get the child when they come back. If you wrongfully claim a dependent, it can delay your refund and lead to more paperwork.
5. Not Keeping Good Records
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People often make the mistake of losing track of receipts, forms, or other important financial papers. Keeping good records can help you get deductions for things like medical bills or donations to charity. Keep your things in order to make sure you have all the papers you need when you file.
6. Overlooking Deductible Expenses
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You can write off a lot of costs, like child care, mortgage interest, and medical bills. A lot of families don’t know they can get these tax breaks. Throughout the year, keep track of all the expenses you can deduct, and talk to a tax expert to ensure you’re claiming all the deductions you’re entitled to.
7. Not Signing and Dating the Tax Return
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As simple as it may seem, some people forget to sign or date their tax return before sending it in. If you don’t sign your return, it isn’t valid. Ensure your form is signed and dated correctly again to avoid delays.
8. Filing Before Receiving All Documents
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If you file your tax return before getting your tax documents, things could go wrong. You might miss important income information if you file before getting a W-2 or 1099. Don’t file your return until you have all the forms you need. If you don’t, you may have to make changes later.
9. Not Updating Personal Information
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Ensure that your address, marital status, and the number of people dependent on you are correct in your personal information. If these things change, it could affect your tax return. If your personal information is wrong, you might not get your refund immediately or even reject your return.
10. Forgetting to Report Taxable Unemployment Benefits
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Many people forget to include unemployment benefits on their tax returns, even though they are taxed. If you don’t get this money, you could face fines or audits. Make sure that the unemployment benefits you reported are on your Form 1099-G.
11. Incorrectly Claiming Tax Credits
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You can get tax credits for your family, like the Earned Income Tax Credit (EITC) and the Child and Dependent Care Credit, but you must meet some requirements. If you claim these credits incorrectly, you could be disqualified. Before you apply for credits, make sure you read the requirements carefully.
12. Not Claiming the Standard Deduction
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If a family doesn’t itemize, they might forget to claim the standard deduction. Getting less taxable income is easy to do. If you’re not itemizing, make sure you claim the standard deduction because it gives most families a big tax break.
13. Ignoring State Taxes
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Many families only think about their federal taxes and forget about their state taxes. Different states have different taxes, and if you miss the deadlines or file your taxes wrong, you could be fined. Before you file, make sure you know the tax rules in your state.
14. Not Taking Advantage of Retirement Contributions
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You can get tax breaks for putting money into retirement accounts like IRAs. Some families forget to send in their taxes before the due date. Make sure you put as much money as possible into your retirement account to save for the future and lower your taxable income.
15. Failing to Report Non-Cash Charitable Donations
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If you give clothes or other things to charity, you should write down how much they are worth on the market. Many people forget to claim donations that aren’t cash or don’t properly show how much they’re worth. For any gifts that aren’t cash, keep careful records and receipts.
16. Claiming Incorrect Social Security Numbers (SSNs)
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If your SSN is wrong, it could delay your refund and cause more problems. Make sure that all of your SSNs are correct for you, your spouse, and any dependents. If you get your SSN wrong, your tax return could be denied or delayed.
17. Not Using Tax Software or Professional Help
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It might look like a good way to save money, but not using tax software or a professional can cause you to make mistakes. Tax laws are complicated, and you can get help from professionals or software to make sure you’re getting the most money back. If you’re unsure, getting help will save you time and money in the long run.
18. Missing Out on Education Credits
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Credits are available to assist your children or yourself in paying for education. Among the credits are Lifetime Learning and American Opportunity. Many families overlook these credits since they are unsure they could be obtained. To cut your bill, find out whether you qualify for any tax breaks for education.
19. Misunderstanding Health Savings Accounts (HSAs)
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Using a health savings account (HSA), you can fund medical expenses from pre-tax income. Many families, though, do not completely grasp the tax advantages. Penalties may follow for neglecting to fund an HSA or misusing the funds. Make sure you follow the guidelines and maximize the tax advantage using your HSA.
20. Failing to File on Time
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If you don’t file your taxes by the due date, you may have to pay penalties and interest on the money you owe. It’s important to get your tax return in on time or ask for extra time if needed. Keeping track of the tax deadline will help you avoid paying fees you don’t need to and make sure you file on time.