10 Common Tax Preparation Mistakes
Take this advice from a CPA to avoid frequent mistakes that could cost you money when preparing your taxes.
A version of this article originally appeared on Learnvest.com.
1040, 1040A, 1040EZ, Schedule C, Schedule B, 1099, W-2…doing taxes is like trying to speak a foreign language that you’ve never taken a course in. Given how complicated the tax code is, it’s not surprising that people mess up when filing their returns—and those mistakes can cost people thousands. (Learn how to avoid the top tax filing mistakes.)
As a Certified Public Accountant with his own boutique firm, Gary Craig has seen it all. He shares some of the most common tax blunders that he witnesses to ensure that your own filing goes smoothly.
1. Shopping for the Biggest Refund
Craig says that perhaps the biggest mistake is trying to find someone who will give you the largest refund without making
sure that it’s accurate. “I got a guy last year who came in at the very last minute on April 10,” says Craig. “He and his
wife filed separately to take more exemptions, and the tax preparer he’d initially used was really aggressive about reimbursing.
The guy was flabbergasted by how much he still owed and came to me ‘refund shopping’ to see if I could lower his tax liability,
and I had to tell him, ‘You actually owe more,’ because the other preparer was so aggressive with the deductions.”
2. Not Making Sure That Your Tax Preparer Signs the Return
If your tax preparer is confident in the accuracy of the return that he’s prepared for you, then he’ll have no trouble putting
his name on it. But if he doesn’t sign the return, it could be a sign that he’s done something shady. In fact, Craig says,
“If [the mistakes on your return are] serious and seem intentional, you can report him to the IRS. That’s grounds for losing
3. Being Too Aggressive With Unreimbursed Business Expenses
This mistake has an easy solution: In addition to keeping those receipts for unreimbursed business expenses, always keep a
record of your company’s reimbursement policy—even for past years. This is the only document that will save you in an audit.
Without it, the IRS won’t recognize those expenses.