13 Common (And Costly) Mistakes First-Time Tax Filers Make

Benjamin Franklin famously said the following: "Nothing is certain, except death and taxes."

While you can't do anything about the former, there are steps you can take as a first-time filer to make taxes less scary.

To avoid the pain of surprising financial mistakes, learn more about how to steer clear of the following common and costly errors.

The IRS requires you to report all job-related income, regardless of the source.

That means that if you earn extra money by driving for Uber, delivering for DoorDash, or mowing lawns for neighbors, you must include the amount you earned on your tax return.

Fortunately, you can also deduct some of your costs of doing business. For example, you may qualify to deduct your mileage if you use your car for business purposes.

Filing your taxes as soon as possible can feel like a relief. Plus, it might help you get a tax refund faster.

However, don't file until you are sure you have received all tax-reporting documents. For example, if you contract to work for a company, the business is not required to mail you a 1099-NEC form until Jan. 31.

It can be tempting to cast your lot with a tax preparer who makes big promises about saving you money on taxes. However, remember it is you — and not the preparer — who will ultimately be held accountable for errors or underpayment.

For this reason, you should strongly consider using trusted tax-preparation software, a certified public accountant, or another tax professional with a great reputation.

It is possible that your parents or other family members plan to claim you as a dependent on their tax return. If that is the case, it might impact how you file. In some situations, it might even mean you don't have to file at all.

The mistake of not realizing you are a dependent most often occurs with young people filing their first tax return. Make sure to find out if someone plans to claim you as a dependent.

If necessary, speak with a tax professional who can explain how this will impact your own filing requirements.

Before you file a return, select the appropriate filing status. Options include:

1. Single
2. Married and filing jointly
3. Married and filing separately
4. Head of the household
5. Qualifying widow or widower with a dependent child

Choosing the wrong filing status could leave you with less money in your pocket.

For example, if you qualify as head of the household, you may be entitled to a more generous standard deduction than if you file as a single individual.

Carefully search for all opportunities to take deductions and credits. Doing so can save you money.

One way to find hidden tax breaks is to use tax-filing software. For example, the software will explain how to qualify for charitable contributions, or how to lower your tax bill if you have lost money on specific investments.

Tax-filing software will also alert you to credits such as the Child Tax Credit, the Earned Income Tax Credit or education credits.

Lowering your taxable income should reduce the amount of money you owe to the government. So, it makes sense to take advantage of programs that decrease this income.

Contributing to retirement plans such as a 401(k) or to a health savings account (HSA) can reduce the amount of your income that is subject to taxes.

You're responsible for paying more than federal taxes. Unless you live in a state without an income tax, you typically are expected to file a state tax return as well.

Failure to file by the deadline can make you liable for penalty payments and interest.

Incidentally, the states that do not tax income are:

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Since this is your first time filing taxes, you very likely do not have a complicated tax profile. So, don't overcomplicate the process.

Consider using tax-preparation software to guide you. Some software is free to use for the most basic types of returns.

Filing your taxes correctly is important. Mistakes can cost you money in the form of penalties and interest.

Just as you would double-check your work before handing in an exam, first-time filers should be especially careful before filing their first tax return.

Pay special attention to the accuracy of Social Security numbers, bank account numbers, the spelling of names, and all financial information.

The IRS has strict tax-filing deadlines. Filing late can result in penalties and interest that will cost you money. If you're expecting a tax refund, filing late will also delay your payment.

In 2025, you must file your tax return by April 15 unless you request an extension. Self-employed individuals — including those who perform gig work or contract work — typically need to file quarterly taxes in addition to their yearly tax return.

The IRS only accepts properly signed tax returns. Whether you sign by hand or electronically, your forms are considered incomplete until signed by all parties. For example, if you file a joint return, both spouses must sign.

Your signature tells the IRS that you vouch for the information included in your return and accept responsibility for errors.

Paying taxes is likely one of your biggest expenses of the year. If you want to trim that bill in the future, it will help to plan throughout this year for the return you will file in early 2026.

If you are unsure about which steps you can take to lower your bill, talk to your accountant or other tax professional. The time to plan is now.

There is a lot to learn when you are a first-time tax filer. By filing on time and avoiding mistakes, you can lower your financial stress.

Fortunately, tax-return software can make the process of paying taxes much easier if you are a first-time filer. However, if the thought of using software makes you nervous, consider reaching out to a tax professional for help.