4 Tips for Proper Tax Filing

It’s a new year, and time to put resolutions into action. Topping the list of to-dos should be a commitment to financial health and well-being, which starts with a successful tax season. Tax filing can be complicated, even for households with relatively straightforward finances. The process takes time, and small mistakes can exacerbate it, triggering delayed refunds, penalties, or unwanted attention from the Internal Revenue Service (IRS).

According to recent IRS data, the agency received nearly 141 million individual income tax returns in 2025 and processed about 138 million. However, more than 13 million were “suspended” during processing pending additional review, likely due to errors and inconsistencies. Math errors alone account for millions of IRS notices annually. Understanding what to check and how to prepare can help filers avoid missteps and the consequences that follow. Here are four important ways to help make tax filing smoother in 2026 and beyond.

Record Personal Details and Income Correctly

Accuracy is the foundation of a seamless tax filing process. Taxpayers should carefully verify all personal and financial details, including names, filing status, Social Security numbers (SSNs), and direct deposit information, as well as a complete accounting of all income, including wages, bonuses, interest, and dividends. The IRS cross-checks tax returns against the W-2 and 1099 forms it receives from employers and financial institutions. Contract and freelance income are commonly troublesome when Form 1099-NEC totals do not align with what a filer reports. Taxpayers should request a corrected form from their employer or financial institution before filing if any information seems incorrect to prevent delays, penalties, or IRS scrutiny.

Double Check Calculations

Math errors remain one of the most frequent reasons the IRS flags a return. Manual entry often introduces errors, so while tax software and professional preparers can reduce the risk of mistakes, they cannot eliminate them. A final, thorough calculation check and careful review of credits, deductions, and carryforwards can help avoid correction notices and processing issues.

Choose the Right Deduction Strategy

For many filers, the standard deduction remains the simplest option. Following the enactment of the One Big Beautiful Bill Act (OBBBA) in 2025, the standard deduction is $15,750 for single filers and $31,500 for married couples filing jointly for the 2026 tax season (2025 tax year). 

If a taxpayer’s deductible expenses exceed the standard deduction, they may benefit from itemizing. Scenarios may include:

• Significant mortgage interest payments
• Unreimbursed medical expenses exceeding 7.5% of adjusted gross income
• Large charitable contributions
• State and local taxes (SALT) paid, capped at $40,000 (OBBBA increased from $10,000)

IRS tools, such as the Interactive Tax Assistant (ITA), or guidance from a tax professional, can help taxpayers determine which approach is more advantageous for their situation. A financial advisor’s tax planning expertise can provide beneficial strategies for the year ahead and beyond.

Avoid Tapping into Retirement Accounts Early

While early withdrawals from 401(k)s or individual retirement accounts (IRAs) may seem like an easy solution during financially stressful periods, they have tax ramifications that can erode savings in the long term. For individuals under age 59 ½, early distributions generally cause:

• A 10% early withdrawal penalty
• Ordinary income taxes on the withdrawn amount

A $10,000 withdrawal, for example, could result in a $1,000 penalty plus federal and state income taxes. Anyone taking an early distribution must report it on their tax return to avoid additional penalties and interest. Because of this, it’s wise to explore other alternatives before dipping into retirement savings.

Final Thoughts

A thorough review before submitting a return is one of the easiest ways to reduce filing errors. Take time to:

• Recheck names, SSNs, addresses, and bank details.
• Include all required signatures.
• Review credits and deductions to ensure nothing was overlooked. The Earned Income Tax Credit (EITC) is a prime example. The IRS estimates that roughly 20% of eligible taxpayers fail to claim it. For tax year 2025, the credit can be worth up to $8,046, depending on income and family size.

Start the year with a commitment to your financial well-being and solid tax habits. Staying organized, checking details carefully, and understanding the available credits and deductions can help you maximize your tax outcomes. SHP Financial can help you go beyond filing with proactive planning, while also connecting you with trusted tax professionals. Contact us today for a complimentary review to align your tax strategy with your broader financial goals.