March 2026
The information in this article is considered accurate as of its publication date (March 2026). Tax laws and figures change regularly, so please reach out to confirm how current rules apply to your situation.
Most people don't lose money on their taxes because they cheated or made arithmetic errors. They lose it quietly, in the gap between what they filed and what they could have filed if someone had asked better questions.
Some of these mistakes result in paying more than you legally owe. Others create IRS problems that cost time and money to resolve. A few are the kind that compound — they don't just hurt this year, they hurt every year you repeat them.
Here are the ones we see most often.
This is the big one, and it happens more than people realize — especially to self-employed individuals, small business owners, and real estate investors.
Common deductions that get missed:
The pattern here isn't laziness. It's that nobody asked. The software presents boxes; you fill in what you know about. Nobody prompts you to think through what you spent last year on your business and whether any of it was deductible.
This deserves its own mention because it goes both directions.
Some people skip it entirely because they've heard it's an audit red flag. That reputation largely dates from decades ago when the rules were murky. Today, the home office deduction is well-defined, commonly claimed, and entirely defensible if you meet the requirements: the space must be used exclusively and regularly for business. It can't be the kitchen table you also eat at.
Other people claim it when they don't qualify — remote employees working from home, for example, generally cannot deduct a home office on their federal return under current law. The deduction was suspended for employees from 2018 through at least 2025.
Getting this wrong in either direction has consequences. Missing it costs you money. Claiming it incorrectly creates exposure.
Need help with your 2025 tax return?
A federally credentialed Enrolled Agent will review your situation personally, find what you're entitled to, and give you a clear quote before any work starts.
Self-employed individuals pay both the employer and employee portions of Social Security and Medicare — a combined 15.3% on net earnings. That stings. What many people don't realize is that you can deduct half of your self-employment tax directly from your gross income.
This above-the-line deduction doesn't require itemizing, and it's calculated automatically — but only if someone actually runs the numbers. If you're using software and breeze past this section, or if your preparer doesn't address it, you may be overpaying.
Speaking of above-the-line: many taxpayers assume that if they take the standard deduction, deductions stop mattering. That's wrong.
Above-the-line deductions reduce your adjusted gross income before the standard deduction is applied. They're available regardless of whether you itemize. They also affect your eligibility for other credits and deductions that phase out based on AGI.
Commonly missed above-the-line deductions:
If your AGI is inflated because you missed these, you may also be losing credits that phase out at higher income levels — a double hit.
When you sell a stock, mutual fund, or piece of real estate, your taxable gain is the sale price minus your basis — roughly what you paid for it. If you can't establish your basis, the IRS can treat the entire sale price as gain.
This is especially common with:
If you're itemizing, charitable contributions are deductible — but the rules have specific requirements that people routinely get wrong.
The last point is worth pausing on. Selling appreciated stock to fund a charitable gift means you pay capital gains tax on the sale, then donate the after-tax proceeds. Donating the stock directly bypasses the capital gains entirely. The charity gets the same value. Your tax bill is lower. The difference can be substantial — we've seen it reach $10,000 to $15,000 or more in a single year for donors with highly appreciated positions.
If you're self-employed, have significant investment income, or receive any income without withholding, you're generally required to make quarterly estimated tax payments. Fail to do so, and you'll owe an underpayment penalty even if you pay in full by April 15th.
The penalty isn't enormous, but it's avoidable. More importantly, people who skip estimated payments often find themselves with a large balance due at filing — one they weren't budgeting for.
The fix is straightforward: calculate what you expect to owe for the year and pay it in four installments. A tax professional can help you set the right amount, especially if your income varies.
Rental property owners are required to depreciate the cost of their property over 27.5 years. This is a significant annual deduction — and it's not optional. The IRS assumes you've taken it whether you did or not, which creates a problem when you eventually sell.
When you sell a rental property, you owe depreciation recapture tax on the total depreciation you should have taken — even if you didn't actually take it. Skipping the deduction doesn't avoid the tax. It just means you paid more during the ownership years without any benefit, and still owe the recapture on sale.
If you've owned rental property for years and aren't sure whether depreciation has been properly calculated on your returns, it's worth reviewing.
TurboTax doesn't make math errors. The calculations are correct. The problem is more fundamental: the software only knows what you tell it.
TurboTax asks questions based on what you've entered. It can't notice that you mentioned a side business earlier in the year and wonder whether you're tracking mileage. It can't ask whether any of your stock sales involved reinvested dividends or an RSU vesting event that affected your basis. It doesn't know that your rental property hasn't been depreciating correctly for three years. It won't suggest that donating your appreciated shares directly to your alma mater would save you money before you sell them.
The software is a very good form-filling tool. It is not a tax advisor. It does not think about your situation — it responds to your inputs. For a W-2 household with no investments, no business, and no rental property, that's usually fine. For anyone with financial complexity, the gap between "what TurboTax filed" and "what you could have filed" is real — and it often doesn't show up on the return itself.
The mistakes don't look like errors. The return balances. The math checks out. Everything is filed on time. You just paid more than you needed to, and nothing in the software told you.
Failing to file is more expensive than failing to pay. The failure-to-file penalty is 5% of unpaid taxes per month, up to 25%. The failure-to-pay penalty is 0.5% per month. If you can't pay what you owe, file anyway and work out a payment arrangement — the penalty difference is significant.
If you need more time, file for an extension. An extension gives you six additional months to file your return (not to pay — you still need to estimate and pay by April 15th). Extensions are automatic and require no explanation. There's no reason to file late without one.
Tax planning isn't a once-a-year exercise. The decisions you make throughout the year determine your April outcome. Major life changes — marriage, divorce, a new child, a home purchase, starting a business, a large inheritance, retirement — all have tax implications that are best addressed when they happen, not after the year is over.
A job change is a good example. If you leave a job mid-year and your new employer starts withholding at an annualized rate based on your new salary, they don't know you already earned income at the previous job. The combined withholding from both employers for the year may fall short of what you owe. Without an adjustment — either to your W-4 or through an estimated payment — you'll discover the shortfall at filing.
The pattern is consistent: the people who pay more than they should almost never made a single large mistake. They made a series of small, invisible ones — missed deductions, untracked basis, unchanged withholding, unclaimed elections — that added up quietly over time.
The fix isn't complicated. It's having someone in your corner who knows your situation year-round and asks the right questions before December 31st, not after.
Think you might be leaving money on the table? Reach out — we're happy to take a look at your situation and give you an honest assessment.