Incorrect Social Security
Computed incorrect tax owed
Wrong earned income credit
Wrong child tax credit
Wrong refund/balance due
Not all of the following tax mistakes will lead to an Irs audit, (some of them simply keep you from saving money). Nonetheless, you should still be aware of these errors, and if at all possible, avoid making them by e-filing.
Choosing the wrong filing status
Not choosing the filing status that is most beneficial to you. Often you won't have a choice, but certain filing statuses are much less desirable when it comes to taxes. For instance, the married filing separately filing status makes you ineligible for most tax breaks. (NOTE: the Irs is cracking down on those filing under the wrong status illegally to get the benefits of that status.)
No proof of purchases
Not having receipts for expenses, donations, or sales. You should have receipts for anything you claim, even charitable donations. If the IRS audits you and asks for receipts as proof, you could be fined if you can't supply them.
Not indicating a rollover as tax-free
Not specifying that certain amounts rolled over from retirement accounts to an IRA are tax free. You must indicate on your tax return that these are tax free. Otherwise, the IRS will add it to your taxable amount and ask you to pay more.
Not claiming seller's mortgage points
Forgetting to claim the mortgage points paid by the seller. This is a completely legal tax maneuver taxpayers often overlook. You can claim the points paid by the seller as long as you also reduce the tax basis of your new home by the amount of seller-paid points you are deducting. This is strictly beneficial to you, so you'll not be fined or audited if you fail to take advantage of it.
Filling out the Schedule D when you don't need to
Filling out Schedule D when all you have are long term gains from mutual fund distributions. If these are your only sources of long term gain, simply enter the information directly onto your tax return. Once again, filing a Schedule D even though you don't need to has no negative repercussions, except developing a headache and wasting time.
Not getting a social security number
Not getting a social security number for a new baby. Without a social security number the IRS may not count your newborn as a dependent and you may lose out on a tax break.
Some general thoughts on tax return errors
Although these are all very simple tax errors - the first thing you should realize about filing a tax return is that every little mistake affects the entire return.
When you prepare your tax return each year, check all the information you submit. This means paying close attention to every detail, down to verifying that the social security number on your tax return is actually yours.
H&R Block is designed to triple-check all calculations, the filing process, and any and all credits and deductions claimed, to make absolutely certain that you are not making costly mistakes that can result in penalties, and that you don't miss out on any possible tax savings.