The Internal Revenue Service (IRS) has issued an alert to U.S. taxpayers ahead of the 2025 tax filing season. According to the agency, filing returns with errors can lead to significant penalties, accrued interest and, in extreme cases, the loss of the corresponding refund. The tax authorities have been emphatic in pointing out that, for this year, there will be no exceptions for those who fail to comply with the rules. Here are the most common errors, the main associated risks and how to take advantage of the new tools the IRS has introduced, such as the expansion of the Direct File platform to more states.
Top tax return mistakes that can lead to penalties
Most of the common errors taxpayers make on their tax returns are easily avoidable and you can visit this points on official web IRS. A good realization saves time and effort by not having to correct it afterwards:
- Failure to file on time: One of the most common problems is the late filing of the information or beneficiary return. The IRS penalizes those who fail to file forms by the deadline, which for most taxpayers will be April 15, 2025. Meeting the deadlines is key to avoiding penalties.
- Failure to pay taxes on time: Just as it is mandatory to file your return on time, it is also crucial to pay the full amount due by the deadline. The IRS imposes penalties on those who fail to pay on time, and interest will begin to accrue on the overdue balance until it is paid in full.
- Income reporting errors: Understating income – or, in practical terms, underreporting income – can trigger penalties and increased scrutiny by the taxing authority. The IRS has reiterated that it has cross-checks in place to detect inconsistencies.
- Claiming improper deductions or credits: Attempting to benefit from refunds, credits or deductions for which taxpayers do not qualify is another common violation. The agency clarifies that these practices can result in severe penalties or even outright denial of a refund.
What happens if you do not pay the penalties issued by the IRS?
The IRS details on its official website that, in case of failure to cover the penalty within the indicated deadline, additional interest will accrue on the amount owed. “The date from which we begin charging interest varies depending on the type of penalty. Interest increases the amount you owe until you pay your balance in full,” the agency explains. This increase will continue until the taxpayer pays the debt in full, so it is recommended to act quickly to avoid unnecessary charges.
Options to avoid or reduce penalties
Although the IRS is strict in the application of penalties, it offers several alternatives to taxpayers to alleviate or eliminate them in certain circumstances:
- Demonstrating reasonable cause: If the taxpayer proves that the error was due to a good faith motive and presents corresponding evidence, he or she may qualify for penalty relief. “The reasons that qualify for relief due to reasonable cause depend on the type of penalty you owe and the Internal Revenue Code laws,” the agency states.
- Contesting the penalty: If you disagree with the amount or reason for the penalty, you can contact the IRS through the toll-free number listed on the notice or send a letter stating your reasons for requesting reconsideration of the penalty.
Recommendations to avoid problems with the IRS
To minimize risks and ensure compliance with tax obligations, the IRS suggests:
- File on time: respecting the deadline is the best way to avoid late penalties. This year, the IRS has confirmed that the filing season will begin on January 27, 2025, so it pays to have all documentation ready in advance.
- Check the accuracy of the information:Before sending the return, it is essential to verify that all the data -from income to deductions- is correct. An error in the Social Security number or in the figures reported can delay the process or generate additional inspections.
- Consult with an expert: Having the support of a certified tax advisor or a licensed professional can go a long way in avoiding mistakes and shielding yourself from a possible IRS examination.
- Take advantage of IRS tools: The IRS offers resources such as the Free File platform and the “Where’s My Refund?” refund checker, which facilitate the filing process. It also continues to improve virtual access to provide immediate assistance.
What’s New for the 2025 tax season
The IRS has announced a number of enhancements intended to modernize and streamline the tax filing process. Highlights include:
- Expansion of direct file: Beginning January 27, 2025, the Direct File platform will be available to taxpayers in 25 states, adding 13 new territories to the 12 that were part of the pilot program last year. This tool allows the filing of the federal return free of charge and guides the taxpayer to the corresponding state systems to complete the local return.
- More credits and deductions covered: This year, Direct File will cover tax situations such as the Child and Dependent Care Credit, the Premium tax credit, the credit for the elderly or disabled and deductions associated with Health Savings Accounts.
- Increased virtual assistance: Chatbots and voice assistants will be incorporated to provide immediate assistance in English and Spanish, allowing taxpayers to resolve questions without having to wait for a representative.
- Deadline: Most taxpayers will be required to file by April 15, 2025, by which date more than 140 million individual forms are expected to be received. Those who e-file and choose direct deposit could receive their refund in less than 21 days.
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