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No matter how you tackle your taxes, here are errors to watch out for. Each dependent exemption is worth ,9, although some higher earners will lose part or all of these breaks this year, due to the alternative minimum tax or a new “phaseout” provision that limits the exemption.

“Tax complexity confounds taxpayers and even preparers, and it’s a major source of tax mistakes,” says Nina Olson, the national taxpayer advocate, whose role is to be the taxpayers’ voice before both Congress and the IRS. Olson’s latest data, individuals and businesses spend more than six billion hours a year complying with income-tax filing requirements.

“Every year there’s talk of simplifying the code, yet every year complexity seems to increase.” Consider: Last year’s “fiscal cliff” revisions brought the total number of tax changes since 2001 to 4,838, or more than one a day, says Mark Luscombe, principal analyst at tax publisher CCH, a division of Wolters Kluwer. In 2010 that came to about 8 billion, or 15% of total revenue collected.

But that is expensive, and professionals can make mistakes as well—especially if clients fail to share important information.

“Preparers aren’t clairvoyant, and they don’t know what you don’t tell them,” says Laura Peebles, a tax specialist at Deloitte Tax in Washington.


It's also the support base for Viktor Yanukovych, the Ukrainian president who fled to Russia last month after three months of protests in the capital, Kiev, triggered by his decision not to sign an agreement with the European Union. Thanks to the growing complexity of the tax code, that is 150 million opportunities for U. taxpayers to shortchange either themselves or Uncle Sam by making multiple errors.


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