10 Tax Mistakes and Some Scams to Avoid

Here are 10 of the most common tax mistakes made on income-tax returns, according to the Internal Revenue Service. Tax mistakes can delay processing of your return and mailing of your refund, and lead to more serious problems such as audits.

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Failing to Sign and Date Return

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It sounds so simple, doesn't it? And yet, year after year, one of the most common tax mistakes is forgetting to sign your tax return. The IRS does not accept tax returns that are not signed. And remember: Both spouses must sign a joint return.

See more: Top 5 Tips for Getting Your Tax Refund Quickly

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Checking Wrong Filing Status

Another common tax mistake is choosing the wrong filing status. You have five choices: single, married filing jointly, married filing separately, head of household and qualifying widower. Taxpayers often incorrectly claim head of household filing status without meeting the requirements. 

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Messing up Social Security Numbers

Here's another easily avoidable tax mistake: The names and Social Security numbers for the taxpayer, taxpayer’s spouse, dependents, and children who qualify for the Earned Income Credit or Child Tax Credit must be included on the return exactly as they appear on the Social Security Cards.

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Failing to Report Income

According to the IRS, taxpayers often make the mistake of failing to report income that's not including on a W-2 or 1099 form such as rental income or self-employment income. If you forget to report that type of income, it may cost you in the long run. The IRS can assess interest and penalties.

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Using the Wrong IRS Form

There are so many different kinds of tax forms it's easy to understand why this is among the most common mistakes. Take care to review the instructions on all forms and schedules to make sure you're using them correctly and accurately.

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Claiming Inelegible Dependents

A qualifying dependent can be a child or a relative, but never your spouse. To claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. 

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Overlooking the Earned Income Credit

The Earned Income Credit is designed for low- to moderate-income working individuals and families. Congress approved the tax credit in 1975 in part to offset the burden of Social Security taxes and to provide an incentive to work. Both your earned income and adjusted gross income needs to be within certain ranges for you to qualify. 

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Failing to Pay and Report Payroll Taxes

If you hire household workers such as a house cleaner, an in-home caregiver, or a nanny, you must pay and report payroll taxes beyond a certain income threshold.

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Forgetting About the Alternative Minimum Tax

Federal tax laws provide tax benefits for certain kinds of income and allow special deductions and credits for certain kinds of expenses. The alternative minimum tax is an attempt by the IRS to ensure that anyone who benefits from these tax advantages pays at least a minimum amount of tax, according to the government.

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Failing to File a Return

Yes, it seems silly to even bring this up. And yet many Americans make this tax mistake. Even if you don't owe taxes to the government, you've still got to file a return if you earned an income. And if you are due a return? Bad news: Taxpayers forfeit refunds if they don't file returns within three years.

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Also Watch for Fake IRS Agent Scams


Even with a letter-perfect tax return, you can still be tripped up – in a costly way – by an aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants and elderly persons. The caller claims to be an IRS agent, but in reality is a con artist using a fake name and a bogus IRS identification badge number. The caller may know a lot about the victim, and usually use spoofing technology to alter the caller ID to make it look like the call is coming from the IRS.

The scamming callers tells their victims they owe the IRS money that must be paid immediately and only through a pre-loaded debit card or wire transfer. Victims who are hesitant or refuse to pay are threatened with arrest, deportation or suspension of a business or driver’s license.

In a variation of the fake IRS agent scam, the caller tells the victim they have a refund due to try to trick them into sharing private information. If the phone isn't answered, the scammers often leave an “urgent” callback request.

To help detect these scams, the IRS reminds taxpayers that the real agency will never:

  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
  • Ask for credit or debit card numbers over the phone.

In addition, the IRS notes that it saw an approximate 400% surge in email phishing and malware scam incidents during the last tax season. Once again, these scam emails are designed to convince the victim that the emails are official communications from the IRS or others in the tax industry, including tax software companies. The emails are in fact attempts to gain the victim’s personal financial or tax information related to refunds, filing status, and PIN numbers.

When victims click on links in the emails, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information, which could be used to help file false tax returns. These fake IRS websites can secretly infect the victim’s computer with malware, which can allow criminals to access the victim’s files or track their keystrokes to gain information.

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Your Citation
Murse, Tom. "10 Tax Mistakes and Some Scams to Avoid." ThoughtCo, Jan. 2, 2017, thoughtco.com/top-tax-mistakes-to-avoid-3321649. Murse, Tom. (2017, January 2). 10 Tax Mistakes and Some Scams to Avoid. Retrieved from https://www.thoughtco.com/top-tax-mistakes-to-avoid-3321649 Murse, Tom. "10 Tax Mistakes and Some Scams to Avoid." ThoughtCo. https://www.thoughtco.com/top-tax-mistakes-to-avoid-3321649 (accessed December 17, 2017).