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Nobody wants to pay more in taxes than they have to — but every year, millions of taxpayers miss out on valuable deductions, credits, and tax-saving opportunities simply because they don't realize they're eligible.

Worse, some people assume they're making the right choices, only to find out later that asmall mistake cost them hundreds — or even thousands — of dollars in lost savings.

This article covers some of the most common tax filing mistakes that could leave money on the table, from choosing the wrong filing status to skipping deductions or missing tax credits entirely.

These aren't just paperwork errors — they're the kinds of mistakes that could cost you real money.

Why These Mistakes Matter

They affect your bottom line. These aren't minor typos; these mistakes increase how much you owe or shrink your refund without you even realizing it.

They're some of the most overlooked tax-saving opportunities. Many taxpayers assume they're getting the best deal, but without reviewing all their options, they may be giving up tax breaks they actually qualify for.

A little extra effort can mean big savings. Taking the time to compare your filing status, double-check your deductions, and claim all eligible tax credits could put more money back in your pocket.

The good news? You don't have to be a tax expert to avoid these costly mistakes. With a little awareness and attention, you can keep more of your hard-earned money where it belongs — working for you. Let's take a closer look at the biggest tax mistakes that could be draining your wallet — and how to make sure you're not making them.

1) Choosing the Wrong Filing Status

The wrong choice can cost you a bigger refund or leave you paying more than necessary. Many people default to "Single" when they could qualify for "Head of Household" (which offers better tax benefits). Others assume that "Married Filing Separately" is the best option when, in most cases, "Married Filing Jointly" provides greater savings.

The Impact: Your filing status affects everything from your standard deduction to your tax bracket. Filing as "Single" instead of "Head of Household," for example, means losing out on a higher standard deduction and lower tax rates. On the flip side, if you're married and choose to file separately, you might lose access to key tax credits (like the Earned Income Tax Credit or education credits) unless you meet strict IRS guidelines.

How to Avoid It: Your filing status isn't just a box to check — it determines your tax rate, deductions, and eligibility for credits. If you're unmarried, Single might seem like the default choice, but Head of Household could offer bigger tax benefits if you support a dependent. Married? Filing jointly is usually the best deal, but in some cases, Married Filing Separately makes sense for legal or financial reasons. And if you recently lost a spouse, you may qualify for Qualifying Widow(er) status, which extends joint-filing benefits for two years. Choosing the right category can make a big difference in what you owe — or what you get back.

If you're not sure which category you qualify for, IRS.gov has an Interactive Tax Assistant that can help. Or, better yet, tax software will walk you through the options and recommend the one that saves you the most money.

2) Forgetting to Report All Income

If you have a full-time job, filing might seem straightforward — you just enter your W-2 info, and you're good to go. But what about side gigs, freelance work, or investment income? If you earned money outside of your main job, the IRS knows about it — and they expect you to report it.

Companies, banks, and clients send copies of your 1099 forms (for contract work, dividends, interest, etc.) directly to the IRS. If you leave out income that the IRS already has on file, they'll notice the mismatch. Best case, you get a letter asking for corrections. Worst case? You get hit with penalties and extra taxes for underreporting your income.

The Impact:  Forgetting to report all your income isn't just a small oversight — the IRS already has copies of your W-2s, 1099s, and other income documents, and if they catch a mismatch, they'll adjust your return and may charge interest on unpaid taxes. Repeatedly leaving off income can even increase your chances of an audit. And if the numbers don't line up, your refund could be delayed while the IRS sorts out the discrepancy.

How to Avoid It: Before filing,make a checklist of all income sources — not just W-2 wages, but also freelance work, rental income, dividends, and side hustles like Etsy or Uber. Double-check that your reported income matches your tax forms exactly — if you got a 1099, the IRS did too. Using tax software or a professional can help flag missing income and ensure everything lines up before you submit.

Think you can get away with skipping a small amount? Think again. The IRS's automated systems cross-check everything — and it's a lot easier to report all your income the first time than to deal with an unexpected tax bill later.

3) Overlooking Tax Credits

Many people focus on deductions (which reduce taxable income) but overlook tax credits — which are even better because they reduce your tax bill dollar for dollar. Some credits can even increase your refund if they're refundable!

Tax credits are essentially free money, but if you don't know about them, you might leave hundreds or even thousands of dollars on the table.

The Impact: Missing out on tax credits means paying more than you should — and possibly leaving hundreds or even thousands of dollars on the table. Refundable tax credits are even more powerful since they can increase your refund beyond what you paid in taxes. If you qualify for a credit but don't claim it, you're handing free money back to the IRS.

How to Avoid It: Make sure you're claiming every tax credit you qualify for, especially commonly missed ones like the Earned Income Tax Credit (EITC), Child Tax Credit, and Education Credits — all of which can significantly lower your tax bill or boost your refund. Tax software automatically checks for eligible credits, but if your situation is complex, a tax professional can help ensure you're not leaving money on the table.

Even if you don't think you qualify for a credit, double-check — it could mean a much bigger refund.

4) Not Knowing Whether to Take the Standard Deduction or Itemize

Many taxpayers automatically take the standard deduction because it's easier. But in some cases, itemizing could save you a lot more money.

The standard deduction is a flat amount that reduces taxable income ($14,600 for single filers in 2024, $29,200 for married filing jointly). But if your deductible expenses exceed that amount, itemizing can cut your tax bill significantly.

The Impact: Automatically taking the standard deduction might seem like the easiest option, but it could mean paying more in taxes than necessary if your itemized deductions add up to more. Many people overlook deductible expenses like mortgage interest, medical costs, and charitable donations — missing out on tax savings they actually qualify for.

How to Avoid It: Before filing, compare the standard deduction to your potential itemized deductions — if mortgage interest, property taxes, or medical expenses push your total higher, itemizing could save you money. Keep receipts and records throughout the year so you have a clear picture when tax time rolls around. And if you're unsure? Tax software does the math for you, automatically choosing the option that lowers your tax bill the most.

A little extra effort in tracking expenses could shave thousands off your taxable income.

5) Not Keeping Tax Records

Once you file your taxes, you're done, right? Not quite. Throwing away tax-related documents too soon can come back to haunt you, especially if you ever need to amend your return or — worst case scenario — the IRS audits you.

Many people don't realize that the IRS can audit tax returns up to three years after filing — and six years if they suspect you underreported your income by more than 25%. If you don't have the right paperwork to back up your numbers, you could owe extra taxes, interest, and penalties.

The Impact: If the IRS ever questions a deduction or credit, you'll need proof to back it up — and without proper records, you could lose that tax break entirely. Missing tax documents can also create delays or roadblocks when applying for mortgages, student aid, or business loans, as lenders often require past returns. And if you ever need to amend your return, not having the right paperwork could turn a simple fix into a frustrating hassle.

How to Avoid It: Hold onto W-2s, 1099s, receipts for deductions, past tax returns, and other supporting documents for at least three years. Digitize important records by scanning or photographing them, then store them securely in the cloud or on an external hard drive. Whether you go physical or digital, keep your records organized so they're easy to find if you ever need them.

Think of tax records like insurance — you may never need them, but when you do, you'll be glad you kept them!

Don't Pay More Than You Have To!

The tax code is complicated, but missing out on tax savings doesn't have to be. Whether it's choosing the wrong filing status, skipping deductions, or overlooking valuable tax credits, these mistakes can cost you real money — sometimes without you even realizing it.

But there's no need to despair. A little extra effort can make a big difference. Take the time to review your filing status, compare deductions, and double-check for tax credits you qualify for. Tax software can help, but if your situation is more complex, working with a tax professional may save you even more in the long run.

At the end of the day, your goal isn't just to file your taxes — it's to keep more of your money. By being proactive and avoiding these common mistakes, you can lower your tax bill, maximize your refund, and make sure you're not leaving money on the table.