7 Common Tax Errors That Can Get You In Trouble With the IRS

Tax errors can trigger IRS audits, penalties, and other expensive consequences. Understanding the common mistakes is a strong defense against them. If past tax mistakes have left you struggling, you can compare tax relief services or speak with a qualified tax professional.

Filing in 2025 and 2026 also brings new rules to get right. The One, Big, Beautiful Bill added four new individual deductions that are easy to miss. This guide covers the seven common tax errors to watch for.

Many common tax errors come down to a handful of avoidable slips. According to IRS guidance on common return mistakes, the usual culprits are unreported income, wrong deductions, and math errors. Others include the wrong filing status, missed deadlines, poor records, and overlooked foreign accounts.

Are You Reporting All of Your Income?

A common error is failing to report all your income, which the IRS lists among frequent return mistakes. This is especially true for people with side gigs, freelance income, interest income, and investment property owners.

If you don't report all your income, you could receive an IRS notice and face penalties. To avoid this, keep your tax documents together and don't file too early.

Gig and marketplace earners face extra scrutiny now. The IRS lowered the reporting threshold for third-party payment platforms, so more people receive a Form 1099-K. Because the IRS matches those forms to your return, unreported earnings are easier to catch.

Are You Claiming the Right Deductions and Credits?

You need to confirm you actually qualify before claiming a deduction or credit. Common ones include the child tax credit, education credits, and the home office deduction. Claiming them incorrectly can bring penalties or a smaller refund.

The One, Big, Beautiful Bill also created four new individual deductions for tax years 2025 through 2028, per the IRS. You claim them on the new Schedule 1-A, and each has income phaseouts. Because they're new, they're easy to overlook.

Did You Double-Check Your Math?

Yes — double-checking your math is essential, especially on a paper return. Incorrect calculations can delay processing or lead to adjustments in what you owe, the IRS notes. This matters most if you settle with the IRS by yourself.

Filing electronically helps, too. Tax software handles the calculations and may flag common mistakes before you submit.

Are You Filing Under the Correct Status?

You may be filing under the wrong status if your choice doesn't match your situation. For example, some people file as "single" instead of "head of household." That can mean overpaying or missing certain tax benefits.

There are five filing statuses to choose from:

• Single

• Head of household

• Married filing jointly

• Married filing separately

• Qualifying surviving spouse

Have You Missed Any Deadlines?

Yes — missing filing or payment deadlines can quickly lead to fees and interest. Generally, the annual filing deadline is mid-April. If you pay estimated taxes, watch the quarterly deadlines, too.

People with side gigs or freelance income may owe estimated quarterly taxes. Missing tax deadlines can result in late fees and interest on unpaid taxes.

For 2026, the deadline falls on April 15, with an extension option to October 15. Remember, an extension gives you more time to file, not to pay.

Are You Keeping Proper Records?

You should keep proper records, including invoices, receipts, and other proof of deductions. The IRS recommends keeping them based on your situation. Without a paper trail, you may struggle to prove you qualified for certain tax breaks if you're audited.

Have You Reported Foreign Income and Accounts?

Yes — if you have foreign income or accounts, you must report them or risk expensive penalties. Think of FBAR and FATCA as an extra disclosure checklist the IRS uses to track money held overseas.

As a U.S. taxpayer, you may need to file an FBAR or a FATCA form, per the IRS FATCA reporting summary. Here's when each applies:

These rules matter most if you live abroad.

You can avoid many common tax mistakes by staying organized, reviewing your return, and getting help when things get complex. Here's how to put that into practice:

• Get expert help: Work with a tax preparer or use reputable tax software.

• Review your returns: Double-check your return for errors before submitting.

• Stay organized: Keep all receipts, W-2s, 1099s, and other tax documentation.

• Stay informed: Consult the IRS website for tax updates and resources.

• Get an extension: Consider filing a tax extension with the IRS if needed.

• Confirm your bank details: Double-check your routing and account numbers before you file.

Accurate bank details matter more now that the IRS is phasing out paper refund checks.

Filing an inaccurate return can lead to penalties, interest, and added scrutiny. A common consequence is an accuracy-related IRS penalty for underpayment. You pay a percentage of what you underpaid, and interest accrues until it's paid off.

You could also be selected for an IRS audit. The IRS generally reviews the past three years of returns. It can go back six years if you substantially understated your income, per its audit guidance.

If you're overwhelmed by a tax bill, you're not alone. If you can't pay, the IRS can take action, including wage garnishment or seizing bank accounts or property. When you're dealing with tax debt, you may need to weigh an offer in compromise or bankruptcy.

If the IRS contacts you about a current or past return, respond promptly. Quick action can help you avoid extra interest and penalties.

It depends on the mistake. The IRS often corrects small math errors on its own. It will mail you a notice explaining any change, so you may not need to act.

For changes to your income, deductions, credits, or filing status, file an amended return using Form 1040-X. Correcting it promptly helps limit added penalties and interest.

This guide is useful whether you file a simple return or juggle several income sources. It's especially relevant if you're:

• A W-2 employee who wants a clean, fast, accurate refund.

• A gig worker or self-employed filer with 1099 income to report.

• A senior, tipped, or overtime worker eligible for the new Schedule 1-A deductions.

• Anyone with foreign income or accounts subject to FBAR or FATCA rules.

What happens if you file your taxes incorrectly?

Minor errors are often auto-corrected by the IRS and may just delay your refund. Bigger issues like unreported income or wrongly claimed credits can trigger notices, penalties, and interest.

How do you fix a mistake after filing taxes?

File an amended return using Form 1040-X. See "How Do You Fix a Tax Mistake After Filing?" above for the full process.

What tax mistakes can trigger an IRS audit?

Underreported income and deductions or credits you don't qualify for are common triggers. The IRS often catches these through automated matching of your forms against your return.

Does the IRS make mistakes on your return?

Yes, errors happen, so respond to any notice you receive rather than ignoring it. The IRS generally audits the past three years, up to six if income is substantially understated.

Do you have to report foreign bank accounts?

Yes. You must file an FBAR if your foreign accounts top $10,000 at any point in the year. A FATCA Form 8938 applies once your foreign assets exceed the relevant thresholds.

This article relies on primary IRS guidance rather than proprietary BestMoney research. Sources include IRS pages on common return mistakes, Schedule 1-A deductions, and FATCA and FBAR reporting. It also draws on IRS guidance for accuracy-related penalties, audits, Form 1040-X, and the 2026 filing season.

A credentialed tax professional reviewed this article for accuracy.

• IRS: Common tax return mistakes to avoid

• IRS: Schedule 1-A, additional deductions (Form 1040)

• IRS: One, Big, Beautiful Bill provisions

• IRS: Understanding your Form 1099-K

• IRS: Summary of FATCA reporting for U.S. taxpayers

• IRS: Accuracy-related penalty

• IRS: IRS audits

• IRS: About Form 1040-X, amended U.S. individual income tax return

• IRS: IRS opens 2026 filing season

• IRS: Individual tax filing (2026 deadline)

Next, review your return, fix any mistakes, and get professional help if your situation is complex. Focus on the seven common errors above, especially unreported income, the wrong filing status, and math slips.

Claim any new 2025–2026 deductions you qualify for on Schedule 1-A, and confirm your bank details before you file. If you've already slipped up, you can back-file past returns and consider filing early to avoid tax scams.

Stay organized, stay informed, and request an extension if you need more time. If you're facing penalties or IRS notices, consider consulting a CPA or another qualified tax professional to understand your options.