Common mistakes new tax preparers make and how to avoid them

For new tax preparers, mistakes cost more than time. They can also cost credibility with clients. Filing errors lead to amended returns and uncomfortable conversations that undermine trust. While no preparer starts out perfectly, understanding where mistakes commonly occur helps prevent problems before they reach a client’s return.

Frequent trouble areas for new preparers include filing status confusion, especially when reviewing eligibility rules for head of household. Other areas that can cause costly mistakes include when to use the standard versus itemized deductions. Determining what credits clients are eligible for can be challenging for new preparers as well. Don’t forget that even simple math and data input errors can cause a return to be incorrect. With reliable guidance and the right skill set, these mistakes are avoidable. 

Filing status confusion

Filing status is one of the most common areas of error for new tax preparers. It affects credit eligibility and allowable deductions. That means selecting the wrong status can significantly change a client’s tax outcome in more ways than one.

Why it matters

An incorrect filing status can increase tax liability or delay processing. It also raises questions about the preparer’s attention to detail.

How to avoid it

• Take time during the intake process to fully understand a client’s marital status and household composition. 
• Review support arrangements and ask if the client receives additional assistance in providing for their household. 
• Use IRS guidance to confirm eligibility and document your determination. 
• When filing status is handled carefully, it sets the tone for the entire return.

Dependent rules and eligibility errors

Dependents are another frequent source of confusion. Rules for qualifying children and relatives can be complex and change as family circumstances evolve.

Why it matters

Claiming an ineligible dependent or failing to claim an eligible one can trigger IRS notices or audits and affect credits such as the child tax credit (CTC) and earned income credit (EIC).

How to avoid it

• Maintain an updated list of dependents for each client and review changes and eligibility every year. 
• Ask clear questions about residency support and income. 
• Verify dependent information to protect both the client and your professional reputation.

Standard vs. itemized deductions

New preparers sometimes struggle with determining whether a client should take the standard deduction or itemize. This decision directly affects taxable income and refund amounts.

Why it matters

Choosing the wrong option can result in a higher tax bill and lost savings for the client. It may also lead to questions about the preparer’s technical competence.

How to avoid it

• Compare both options rather than assuming one is better and review them with the client.
• Ensure all deductible expenses are identified and documented before making the decision. 
• Tax software can assist with calculations, but the preparer must understand the underlying rules to explain the outcome to the client.

Common credit errors

Tax credits are valuable but often misunderstood. Errors may occur when determining eligibility or distinguishing between refundable and nonrefundable credits.

Why it matters

Incorrect credit claims can delay refunds, trigger IRS correspondence or require amended returns. These issues cost time and can erode client confidence.

How to avoid it

• Review credit requirements carefully and confirm eligibility under current tax law. 
• Ask follow-up questions and verify supporting documentation. 
• Use a checklist to work with your client to determine what credits they qualify for.
• Understand how credits work, which allows you to apply them correctly and explain results clearly to clients.

Data entry and review oversights

Even when the tax treatment is correct, small data entry errors can create big problems. Incorrect Social Security numbers (SSNs), names or figures can cause returns to be rejected.

Why it matters

Errors that appear careless can damage trust even if they are easily fixed.

How to avoid it

• Slow down during data entry and build time into your process for a thorough review. 
• Many software programs will automatically point out errors or have the capability to directly download reporting forms from employers and other companies.
• Verify key information twice to help catch mistakes before filing and reinforce accuracy.

The value of a calm methodical approach

New preparers often feel pressure to work quickly, especially during filing season. Rushing increases the likelihood of errors and often reduces confidence.

Why it matters

Clients value accuracy and professionalism more than speed. A calm methodical approach reinforces trust.

How to avoid it

• Follow a consistent preparation process for every return. 
• Use checklists that rely on authoritative resources and pause when something does not look right. 
• Remember that knowing when to research or ask for guidance is a strength, not a weakness.

Build your foundation with NATP

NATP supports tax professionals at every stage. Build a strong foundation in individual tax preparation with the upcoming comprehensive NATP online training, Introduction to Tax Preparation, which prepares you for the current filing season. You will gain the technical knowledge and practical skills needed to confidently prepare IRS Form 1040, U.S. Individual Income Tax Return, by working through a clear breakdown of the return and its key supporting schedules. 

Enroll now to sharpen your skills and be prepared to complete basic individual income tax returns with confidence.