You tear open the letter marked “Internal Revenue Service,” hoping it contains an unexpected refund. But, to your dismay, you find that you owe more than you projected because of a mistake on your tax return. Your heart sinks as you figure out where you’ll get the money to pay the bill.
To avoid this scenario, it’s important to exercise caution when filling out your taxes to avoid an error that will come back to haunt you. Keep these 6 tax blunders in mind as you do your taxes. And if you need help getting your taxes done, read to the end for discounts on tax prep services.
1. Getting the credits and deductions wrong: The U.S. Tax Code is 6,871 pages. When you include the federal tax regulations and the official tax guidance, the number of pages rises to approximately 75,000. Even if you consider yourself an old hand in tax prep, there are bound to be breaks and rules you don’t know. Whether it comes from a software program or a live human tax professional, it makes sense to get help when you have complicated taxes. This is especially true if you have a business or make money from a side gig.
2. Making math gaffes: Are you a pencil-and-paper kind of person? If so, you must be especially careful with your calculations at tax time. A tiny mistake in your numbers could mean a huge problem later. So double and triple-check your data, and don’t be afraid to have another family member look at it to proof your work. Also, consider filing for free online at irs.gov to help avoid any mistakes.
3. Using stale personal information: If you’ve been doing your taxes for a while now, it’s easy to get in the habit of just carrying over your data from the previous year’s return. But if you’ve had a child or changed your marital status in the past year and forget to include this information on your return, you risk costing yourself quite a bit of money. Reviewing your previous year’s return is fine, but make sure you update any information that’s changed.
4. Missing signature(s): It sounds basic, but you’d be surprised how often people forget to sign their tax returns. And if you are married and filing jointly, you both need to sign. While you’re at it, add “Double check Social Security number(s)” and “Remember to include payment” to your pre-finalization checklist. You want to avoid a delay and the penalties and interest that can come with it.
5. Overlooking charitable giving: If you’re like most people, you give money multiple times per year to different charities. When it comes time to do your taxes, you must document everywhere you donated money. Get in the habit of tracking your charitable giving, whether by keeping receipts in a folder or scanning them and storing them electronically.
6. Not filing: If you plan on not filing because you aren’t required to because of a low income level, be aware that doing so could mean missing out on an earned income credit. This could take money out of your pocket. On the other hand, if you’re avoiding sending in your tax forms because you owe more than you can pay, be aware that you are only making things worse for yourself by not filing. Instead, contact the IRS about an installment agreement or an extension so you can come up with the funds over time.
Final thoughts.
We all hope to get a refund at tax time and try hard to minimize our tax liability, but sometimes you need to pay. If you owe taxes, rather than stress why not save up a buffer fund in advance? Then you have some or all of your liability covered. If you don’t owe anything, you have a nice bonus to save or celebrate with! We make saving for quarterly taxes easy with our Tax Saver account.* Your small automatic deductions build over the year with healthy interest to leave you with a nice tax nest egg as needed.
If you need help doing your taxes, take advantage of special Member discounts from TurboTax and H&R Block. You can save 20% on TurboTax federal products.** And up to $25 on H&R Block professional tax prep.** Plus, as a credit union Member you can enter for a chance to win $10,000 from Love My Credit Union Rewards.† Learn more now. Good luck with your taxes, and we wish you a tax blunder-free year.
*APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month.
**Discount applies to TurboTax federal products only (no state products). Offer cannot be combined with any other TurboTax offers. Actual prices are determined at the time of print or e-file and are subject to change without notice. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. Offer not valid for Intuit TurboTax Verified Pros. Visit https://turbotax.intuit.com/affiliate/invest3 for complete details.
H&R Block Offer: H&R Block Offer: void if sold, purchased, or transferred and where prohibited. No cash value valid at participating U.S. offices only. A new client is an individual who did not use H&R Block or Block Advisors office services to prepare their 2023 tax return. Discount valid only with or for preparation of an original 2024 personal Income tax return. Coupon must be presented prior to completion of initial tax interview. Discount may not be combined with any other offer or promotion. Expires October 15, 2025. OBTP# 13696-BR ©2024 HRB Tax Group, Inc. All tax situations are different. Not everyone gets a refund. See hrblock.com/guarantees for complete details.
†The Love My Credit Union Rewards Tax Time Sweepstakes is being offered to all credit unions and their members and employees that participate in the LMCUR Tax Services program. The sweepstakes starts January 1, 2025 and runs through April 15, 2025. Members and employees have the opportunity to win $1,000 monthly prizes in Jan, Feb, Mar, and Apr and the grand prize of $10,000. The sweepstakes entry form is located on the Tax Services landing page at https://taxservices.lovemycreditunion.org. There is no purchase necessary and the sweepstakes is open to legal residents of the 50 united states (D.C.) who are 18 years or older and who are members or employees of a U.S. credit union as of December 31, 2024. Members and employees may enter once using a valid email address. Sweepstakes ends April 15, 2025. Click here for Official Rules, prize descriptions and odds disclosure.
