The IRS has been tightening its enforcement and with many making costly errors, it could lead to one getting fined penalties worth up to $5,000. As tax season comes close, the dread seems to loom even larger. To help avoid this costly pitfall, we have identified the most common tax filing mistakes of 2025 and how to avoid them.
1. Failure to File or File Late
Fail to file a tax return by the deadline, and it’s a quick path to a sizeable penalty. In 2025, the due date for filing federal returns is April 15. Failing to meet that date along with not filing an extension would cause penalties and maybe even interest on any taxes owed.
Solution: Circle the date early and set reminders. If you think you’ll miss the deadline, file for an extension and save the penalties.
2. Incorrect Information
Also, errors in entering the wrong Social Security numbers or mismatched names with government records or wrong bank details can get your return rejected or delayed.
Solution: Before you submit, double-check everything. Use tax software designed with error-checking features or seek professional assistance if unsure.
3. Low Reporting of Income
Omitting a source of income from reporting puts up a flag immediately for the IRS. That includes freelance work, anything done on the side, and even income from investments. This is because the IRS gets that income directly from employers and financial institutions. Thus, any discrepancies will trigger audits and fines.
Solution: Gather all W-2s, 1099s, and other income forms before filing. Report income that matches official records.
4. Disregarding Deductions and Credits
Although you might find that deductions and credits reduce your tax, claiming those that you are not entitled to also leads to audit and penalty charges. Some common errors include claiming education credits, claiming credits for children, and home office deductions.
Solution: Claim deductions and credits only that you are eligible to claim for. Consult the IRS guidelines or a tax professional for your eligibility status.
5. Forgetting to Sign Your Return
That kind of return is not valid and could stop processing or even incur penalties.
Solution: Sign electronically or manually as needed.
6. Ignoring IRS Notices
Simply ignoring an IRS notice can quickly lead the problem down an even worse path into penalties and perhaps legal action.
Solution: Be prompt in response to any IRS notices. Contact them directly or seek professional assistance if the notice is difficult to understand.