I’m a Tax Advisor: 5 Mistakes Middle-Class Families Make Every Filing Season
Middle-class families are balancing a lot these days. When they’re not trying to stretch a dollar at the grocery store, they’re worried about their kids’ education and elder care expenses — not to mention planning their taxes. In the hustle and bustle of daily life and preparing for tax season, it’s easy to make a few mistakes when filing.
Sadly, those mistakes can lead to higher tax bills or even an audit — exactly what these families don’t need. To put these issues on their radar, MoneyLion turned to Kyle Paxton, CPA, tax director at James Moore & Co.
Read More: 7 Ways You're Accidentally Committing Tax Fraud
Learn About: 5 Signs You’re Losing Money Every Month — and How To Find the Leaks
“Every filing season, I see the same patterns repeat themselves," he said. "Most middle-class families aren’t making reckless tax decisions — they’re simply reacting instead of planning."
Here are five of the most common mistakes Paxton sees.
1. Treating Tax Filing as a Once-a-Year Event
Most middle-class families start thinking about taxes around March or even early April. Paxton says that mindset can lead to missed opportunities to lower their tax bill.
“The biggest opportunities happen during the year — adjusting withholdings, timing income, managing capital gains or making retirement contributions,” he said. “If you’re only talking to your advisor when it’s time to file, you’re likely leaving money on the table.”
Time is a precious commodity for families on the go, but making a midyear pit stop with your tax advisor can pay off.
2. Overlooking Withholding and Estimated Payments
There are some things in life where you can go with the flow and assume they’ll work out — like when your kid auditions for the lead in a school play. Payroll withholding isn’t always one of them.
Failing to adjust withholding or make estimated payments is a common mistake, especially when income changes. Think about how much can change in a short time.
“Job changes, bonuses, side income or dual-income households often create underpayment surprises,” Paxton said. “A quick midyear review can prevent penalties and large, unexpected balances due.”
3. Missing Out on Tax-Advantaged Accounts
When middle-class families rush to get their taxes over with instead of cultivating a smart strategy, they miss chances to build long-term wealth.
“Retirement contributions, HSAs, 529 plans and even backdoor Roth strategies are often underused. These aren’t just savings vehicles — they’re tax strategy tools,” he said. “Families who build wealth long term consistently maximize these opportunities.”
Refining your tax strategy may take time and effort, but it can deliver lasting results.
4. Not Planning for Life Changes
That old idiom — “life happens” — may sound trite, but it’s true. Life happens through marriages and divorces, selling a home, having children or starting a side business. And when it does, your tax profile can change.
When major shifts occur, Paxton recommends revisiting your tax strategy.
“Many families don’t revisit their strategy after major life events, which can result in missed credits or higher taxes than necessary,” he said.
5. Focusing on the Refund Instead of the Outcome
Paxton understands many people see a refund as the best possible outcome when filing their taxes. But he encourages a different perspective.
“A large refund feels good, but it usually means you gave the government an interest-free loan all year,” he said. “I encourage clients to focus on optimizing overall tax liability and cash flow — not just chasing a refund.”
The Bottom Line
For middle-class families already stretched thin, adding more planning to tax preparation can sound exhausting. But Paxton says it’s not as daunting as it seems — and the long-term benefits matter.
“Middle-class families don’t need complicated tax shelters — they need consistent planning,” he said. “The goal isn’t to eliminate taxes; it’s to be intentional about how and when you pay them. Families who win financially treat tax planning as part of their overall wealth strategy, not just an annual compliance requirement.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
More From MoneyLion: