10 tax goofs many of us keep making

Year after year, the IRS sees Americans committing the same sorts of mistakes on their returns. Many of these errors are easy to avoid; some are more complicated.

Your income-tax return can inflict a special kind of pain when you make a mistake. Even a simple error can cost you time, aggravation, stress and, yes, money. So doing your return dispassionately and carefully is a must.
The Internal Revenue Service says taxpayers make some mistakes again and again. (I see them a lot, too.) If you can keep from making them, you'll avoid much of that lost time, aggravation, stress and lost cash.
Here, according to the IRS, are the 10 most common taxpayer mistakes:
Claiming the wrong filing status
Sorry, you can't just choose to file single or married. Your marital status is determined as of Dec. 31. Anything before that date really doesn't matter for tax purposes. You file either jointly or married filing separately. You may qualify for "head of household," but you have to satisfy all the requirements. You don't qualify just because you consider yourself the head of your household.
Claiming the wrong status could kill your eligibility for the child tax credit, the earned-income credit and exemptions for dependents. Check out the instructions for Form 1040 for detailed information to help you select your correct filing status.
Omitting or using wrong Social Security numbers
The Social Security numbers you list for your dependents, the earned-income credit and the child tax credit must match your dependents' Social Security cards. Otherwise, the IRS computers will reject your credits and deductions.
If you're still doing your return by hand, put down that stone tablet you're reading and pay attention. Make sure your handwriting is legible, at least on your tax return. Although to be fair, I suspect that many of these mistakes attributed to taxpayer error actually result from bad inputting by the IRS.
Failing to use correct forms and schedules
Think of the IRS as a vast bureaucracy that responds to the dictates of an outdated computer system for audit direction. You don't want to anger the computer gods.
If you file your employee business expenses on Schedule A without attaching Form 2106, the computer's gonna click. The more the computer clicks, the more likely that you will get audited.
So, be nice to the computer. Correctly file all of the appropriate forms.
Failing to sign and date the return
This one is easy. If you don't sign the return, you haven't filed. Both spouses must sign a joint return. If you haven't filed, you're going to be subject to all kinds of penalties, not to mention interest on any amounts not paid in full.
The only reason not to sign the return is if the numbers on it would constitute perjury. Do you think the IRS wouldn't notice?
Claiming ineligible dependents
When the IRS started requiring Social Security numbers for claimed dependents, millions of dependents disappeared. I suspect most of them sulked back to their doghouses, flew to their bird cages or jumped back into their aquariums.
In any case, the qualification criteria to claim a dependent are technical and very specific. With nontraditional families, there are the exceptions, the exclusions to the exceptions, the exceptions when the exclusions don't apply and the special rules for the third Wednesday each month.
You'll have to meet each of at least four qualifications. Follow the flowchart in the instructions for your Form 1040. But it's not simple.
Misusing -- or not using -- the earned-income credit
This one I blame on Congress. It's a provision to help the poorest in our nation, but lawmakers designed it to be one of the most convoluted provisions in our tax code.
It's so bad that the IRS reports failure to claim the EIC as its No. 6 top taxpayer mistake and incorrectly claiming the EIC as No. 7.
Lots of crooks -- and unwitting but misinformed taxpayers -- illegally claim the credit. Many of those whom the credit was designed to aid lack the tax sophistication or the dollars necessary to hire a professional to claim those dollars.
Failing to report domestic workers
Even if you don't want to be a Supreme Court justice or the U.S. attorney general, you still have to pay the payroll taxes on your nanny, housecleaner or in-home caregiver.
Sorry, it's the law. If you pay $1,500 or more in 2007 (same as 2006) to any one household employee, you're going to have to withhold, and match, both Social Security (6.2%) and Medicare (1.45%) taxes. You must file Schedule H to compute and report the liability.
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Hidden ways to cut your taxes
Congress renewed some breaks too late to make the forms. Here's how to find out what you're entitled to.
You'll owe federal unemployment taxes if you pay wages of $1,000 or more in any calendar quarter to household employees. You may also owe state employment and disability taxes.
If you pay certain related parties, or employees under age 18 who qualify, you may escape liability. See Publication 926 for details.
Failing to report all income
You can't avoid reporting all of your income just because you don't get a W-2 form or a 1099. Not all income is reported on 1099s. That doesn't excuse you from having to pay tax on it. The fact that there's no reporting to the IRS doesn't prevent the agency from auditing your receipts and reconciling your bank deposits with your reported income.
Unreported income can lead to civil and criminal sanctions. I don't care how lucky you feel. The potential consequences aren't worth the risk.
Failing to check for the alternative minimum tax
The AMT, or "awfully mean tax," was created to catch high-income taxpayers who used allowable deductions and credits to wipe out too much tax liability. It's an alternative computation of your tax, with different deductions, add-backs and flat rates.
You pay the higher of your regular tax or that computed under the AMT.
Unfortunately, because it hasn't been updated to reflect inflation since the original bill was passed, the AMT has been projected to hit about 19 million families in 2007, including 64% of households earning $100,000 to $200,000.
You might not think you're a victim, at least until you get that letter from the IRS with penalties and interest. The IRS has an AMT estimation calculator on its Web site, but, to be sure, run through Form 6251.