How to Avoid Bookkeeping Mistakes That Delay Your Tax Return
When tax season hits, even small bookkeeping mistakes can delay your return, cost you deductions, or trigger IRS scrutiny. Here are the most common pitfalls and how to avoid them before filing.
7 Common Bookkeeping Mistakes That Delay Tax Returns
- Failing to reconcile all bank and credit card accounts
- Mixing business and personal expenses
- Forgetting to track contractor or cash payments
- Misclassifying expenses (e.g., capital vs. operating)
- Ignoring accounts receivable or payable balances
- Filing 1099s or W-2s late
- Waiting until tax season to fix prior errors
The Real Cost of Bookkeeping Errors
- Higher CPA bills to clean up messy books
- Missed deductions leading to higher tax liability
- IRS penalties for incorrect filings
How to Prevent These Mistakes
- Reconcile accounts monthly
- Use automated bank feeds and receipt capture
- Separate business vs. personal accounts
- Hire a professional bookkeeper for monthly close
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FAQs
What’s the #1 bookkeeping mistake before filing taxes?
Not reconciling accounts monthly – it leads to inaccurate returns.
Can bookkeeping mistakes trigger an IRS audit?
Yes. Inconsistent or inaccurate books can be red flags.
How do I fix mistakes quickly before filing?
Outsourced catch-up bookkeeping can reconcile months in under a week.
