Every tax season, I meet with people who are trying their best to file accurately, stay compliant, and avoid surprises. Even so, the same mistakes show up again and again, and most of them are completely preventable.
As we prepare to file 2025 tax returns in early 2026, understanding these issues ahead of time can save you time, stress, and possibly money.
One of the biggest mistakes is filing before all tax documents have arrived. Many taxpayers file in January and later receive an additional W-2, 1099, 1099-K, 1098, or a corrected brokerage statement. Once the IRS receives an unreported form, the numbers on your return no longer match, which can lead to notices, delays, or amended returns. The easiest way to avoid this is to wait until you are certain you have everything, especially if you receive investment forms or 1099-Ks that tend to arrive or change later.
Another common problem involves 1099-K forms. This is now one of the most searched tax questions each year because payment apps and online platforms sometimes report personal payments as if they were income. Some people mistakenly ignore the form, while others report the entire amount even when part of it is not taxable. Reviewing the form carefully and keeping notes that explain personal transfers or reimbursements will help prevent an IRS mismatch.
Many people also discover they owe taxes even though they had withholding. This often happens when someone works multiple jobs, retires midyear, collects Social Security and a pension at the same time, or earns additional side income. Withholding alone doesn’t always cover the tax liability, especially when income comes from several sources. Reviewing your withholding early or making estimated tax payments during the year can prevent underpayment penalties and surprises when you file.
Business owners and gig workers often miss deductions simply because records were not kept throughout the year. Mileage, supplies, tools, software subscriptions, home office details, and other ordinary expenses often go unclaimed when receipts are lost or incomplete. Good recordkeeping makes a significant difference, but even at the end of the year, organizing documents and summarizing expenses will help ensure nothing is missed on your 2025 return.
Filing status and dependent claims are another area where people run into trouble. Shared custody situations, blended families, and informal agreements frequently lead to two people attempting to claim the same child. The IRS will reject one of the returns and delay the refund. This can also affect Oregon’s 2025 Kicker Credit, since the amount is tied directly to your Oregon tax liability. Confirming who is eligible to claim a dependent before filing avoids these delays.
Another mistake is forgetting to report taxable events. Selling a home, selling cryptocurrency, converting retirement accounts, inheriting assets, withdrawing from retirement accounts, switching jobs, or receiving a settlement can all affect your tax return. Even if you are not sure something matters, mentioning it to your tax professional allows us to help you avoid IRS corrections later.
The good news is that these mistakes are easy to avoid with a little planning. Waiting for all forms to arrive, reviewing 1099-Ks carefully, keeping up with expenses, confirming dependents, and sharing all major financial changes with your tax professional will make your 2025 return much smoother. A little preparation now can save hours of stress later.
Frequently Asked Questions About Common Tax Mistakes
What is the most common mistake taxpayers make each year?
The most frequent issue is filing too early and missing a form that arrives later, which leads to mismatched information and IRS notices.
What happens if I receive a corrected 1099 after filing?
If the corrected numbers change your return, you may need to amend it. Always provide the updated form to your preparer.
Do I need to report everything on a 1099-K?
Not always. Some 1099-Ks include personal transfers or reimbursements. Only taxable income should be reported, and documentation should support your explanation.
Why do I owe taxes even when taxes were withheld from my paycheck?
Withholding does not always match your actual tax liability, especially if you have multiple income sources or side income. Adjusting withholding or making estimated payments can prevent this.
Can filing status or dependents delay my refund?
Yes. If more than one person claims the same dependent, the IRS will reject one of the returns, causing delays for everyone involved.
Start gathering documents early, update your tax professional about life changes, watch for 1099-K forms, and review your withholding or estimated taxes early in the year.
