Your Tax Software Might Be Wrong — 5 Signs You’re Paying Too Much (or Too Little)

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Tax software makes filing your taxes a lot easier. You answer a few questions, plug in your numbers and it spits out a refund. But easy doesn’t always mean it’s accurate, since tax software is only as accurate as the information you give it. That means it’s still possible to miss deductions, misreport income or make small mistakes that end up costing you money.

So here are five signs your tax software might be getting it wrong and you might be paying too much or too little. 

Your Refund Seems Way Off From Last Year

If your income hasn’t changed much since last year but your refund looks way off, that’s usually a sign that you’ve entered the wrong information, missed a form, or didn’t apply a deduction correctly. So, if your refund is extremely different, double-check the amounts you entered into the tax software. A typo of just one dollar can have a big impact on your refund.

You Skipped Sections 

Tax software asks a lot of questions, and if you keep skipping questions that are either confusing or overly specific, you might be missing important information. When in doubt, it’s better to go back and review those sections carefully instead of guessing or leaving them blank.

You Had Multiple Income Sources This Year

If you worked a side hustle or investments, your tax situation will be more complicated. Tax software can handle that, but only if you actually enter all the information correctly. If you miss a 1099 form or misclassify your income, you could end up underpaying or overpaying. 

You Don’t See Deductions or Credits Applied

If your return looks a bit too simple, that could also be a sign that something’s missing.

For example, if you typically qualify for credits like the Earned Income Tax Credit, education credits, or deductions for retirement contributions or student loan interest, but none of these showed up when you’re filing this year, you might want to take a second look. 

You Rushed Through the Process

It’s really tempting to just get your taxes over with as fast as possible. But the faster you rush through it, the easier it is to mess something up.

Something as small as typing in the wrong income number, picking the wrong filing status or skipping a checkbox can completely change your results and result in penalties or overpayment. 

So, always take an extra 20 to 30 minutes to go back and double-check everything. If you’re unsure about anything, consider working with a tax professional instead. 

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