Common Mistakes When Providing Information to Your Tax Preparer

Missing information, incorrect information or partial information can lead to delayed tax filing and delayed refunds. Below is a list of the most common mistakes we see when individuals and businesses send us their tax information.

One-Time Events

This is one of the most frequent errors tax filers make. They often simply forget the event happened because it is not ongoing or happened earlier in their tax year. 

This is particularly important to keep in mind when preparing your 2021 documents due to funds that may have been received through the CARES Act or the American Rescue Plan. In 2020, at one point over 35 million returns were delayed, due in large part to discrepancies in reporting stimulus payments.

Examples of one-time events:

• Stimulus Money (Provide a record of any payments—this can include bank statements with the direct deposit or a copy of the deposited check)
  • Individual Stimulus Payment (1 Payment made between March & April 2021)
  • Advance Child Tax Credits (These began in July of 2021. Be sure to provide exact amounts to your preparer.)
  • PPP Loans
  • Employee Retention Credit
• Sale of Stocks or Bonds
• Interest and Dividends from Investments
• Sale or Transaction of Crypto Currency
• Early Withdrawal from Retirement Account
• Charitable Contributions

Other Common Mistakes

• Dependents
  • If a child files their own return but are still a dependent of the parents, their return needs to reflect that or the parents’ return will have an issue when filed.
• Estimated Tax Payments
  • You need to provide the exact amounts paid and the dates those payments were made.
• Tax Notices
  • You should always include any tax notices you received throughout the year, even the issue was already addressed. They may include information about adjustments that need to be taken into account when filing.
• Making Guesses or Estimates

Taking time now and through the rest of the year to compile all of your documentation and ensure everything is correct, will save you time and money when filing your 2021 tax returns.