Biggest Tax Mistakes First-Time Filers Make

If your parents can claim you as a dependent, your return has to say so. Checking the wrong box, or claiming yourself when a parent also claims you, causes the second return to be rejected or flagged. Being claimed by someone else also limits your standard deduction. Talk with your parents before either of you files.

The American opportunity credit and the lifetime learning credit can be valuable, but a student who is claimed as a dependent on someone else's return cannot claim either one. The credit belongs on the parent's return in that case. Whoever claims it will need the school's Form 1098-T.

Some new workers skip filing because they earned little and had tax withheld. That money is theirs, but only if they file. You generally have three years to claim a federal refund, after which the money goes to the U.S. Treasury. South Carolina also requires a return to get any state refund.

Your first job's Form W-4 decides how much tax comes out of each paycheck. Claiming exempt when you do not qualify, or checking the multiple-jobs box when you only have one job, leaves you with a bill or an oversized refund. The IRS Tax Withholding Estimator, or our W-4 withholding calculator, helps you get it close.

Delivery, rideshare, freelance and resale income is taxable whether or not you receive a Form 1099. Net self-employment earnings of $400 or more also bring self-employment tax. The IRS receives copies of the 1099s that are issued, so leaving one off is a common cause of mismatch letters. Our self-employed tax services page explains what gig workers need to track.

Single, head of household, married filing jointly and married filing separately each come with different deductions and credits. Head of household is often claimed by people who do not qualify: it requires that you be unmarried and pay more than half the cost of keeping up a home for a qualifying person. The IRS has an interactive tool that walks you through the choice.

SC residents who are required to file a federal return usually must file an SC return too. Many first-time filers finish the federal return and stop. The state return has its own deadline and its own refund, and missing it can mean penalties if you owe.

A single wrong digit in the routing or account number can send your refund somewhere else or delay it for weeks. Double-check both numbers against a check or your bank's app before you file. Your refund should go into an account in your name, not the preparer's own account.

A notice usually has a response date, and waiting past it narrows your options. Many letters are simple: a request to verify your identity or a question about a missing form. Read it, compare it with your return, and respond by the date shown. Our guide on what to do with an IRS notice walks through the steps.

The IRS warns about ghost preparers: people who prepare your return for pay but refuse to sign it or include their Preparer Tax Identification Number (PTIN). Every paid preparer must sign and include a PTIN. Other IRS warning signs include fees based on a percentage of your refund and promises of an unusually large refund. Never sign a blank or incomplete return, since you are legally responsible for what it says. Our list of questions to ask a tax preparer helps you vet one.