Financial influencer Taylor Price joins ‘Varney & Company’ to understand how changing their mindset can help Americans grow their wealth and achieve the American dream.
tax season The April 15 deadline to file your return or request an extension is approaching and a new report details some of the common mistakes Americans are making throughout the year that are costing them money.
A Report by GOBankingRates Fixed five tax mistakes that could have cost American taxpayers thousands of dollars each year.
Those common mistakes range from not claiming deductions available to the taxpayer or failing to track deductible expenses to misreporting income.
Here’s a look at five tax mistakes outlined in the report.
retired? Here’s when the IRS may take a closer look at your finances
Taxpayers who make mistakes in their tax filing may have to lose their money through small refunds or penalties. (Michael Bocchieri/Getty Images)
Treating taxes as a once-a-year event
Christina Taylor, Vice President of Tax Development and Delivery tax technology The platform April told GOBankingRates that taxpayers who only think about their returns during filing season “miss out on credits and optimizations that they are actually eligible for, which is how you end up giving part of your refund back to the IRS.”
He said that last year “Americans overpaid their federal taxes by about $3,200 on average, and spent billions of dollars and 6.5 billion hours on tax preparation.”
IRS data shows the average tax refund increased nearly 11% from a year ago
The deadline for taxpayers to file their 2025 return or request a refund is April 15. (Kayla Bartkowski/Getty Images)
Not tracking deductions throughout the year
Taxpayers also fail to keep track of their deductible expenses during the year, which often occurs when taxpayers are operating under the assumption that they will claim the standard deduction instead of itemizing their returns.
Those situations can be avoided if taxpayers take care of themselves. charitable contributionWhether made with cash or through non-cash donations, along with medical expenses and any interest expenses they can deduct from their state tax bill.
IRS refund tracker explained: What you need to know before this year’s tax filing deadline
Misreporting investment income or stock compensation
Taxpayers may pay more tax on their investments or the income from them stock compensation Which are sold in the form of restricted stock options or non-qualified stock options.
Jennifer Kohlbacher, CPA and director of wealth strategy at Mariner Wealth Advisors, told GeoBankingRates that taxpayers often fail to correctly calculate or report their tax basis, which can increase the amount of capital gains tax they owe.
The IRS may delay refunds for returns with errors or flag them for audit. (Jordan Vonderhaar/Bloomberg via Getty Images)
Missing estimated tax payments or not updating withholdings
Taxpayers who operate a small business or are self-employed are required to make estimated tax payments to the IRS each quarter throughout the year, and failing to pay the proper amount may result in the taxpayer facing penalties for the underpaid amount as well as any related interest.
Life changes that affect a tax filer’s status, such as getting married or having a child, are situations in which taxpayers should update their withholding information to account for the change, which can reduce taxes owed. the size of their refund By increasing their take home pay.
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Filing errors and poor recordkeeping
Taxpayers may make mathematical errors or typo errors when filing their tax returns that may cause the IRS to flag the tax return for review or even audit.
Taxpayers’ tax refunds may also be delayed due to IRS reviews.
