The remaining common errors are unrelated to the OBBBA legislation but occur all too often. These aren’t just warnings for taxpayers who file their own taxes. Remember, your CPA may not automatically identify some of these issues, as their work relies on receiving accurate documentation.

Missing Mortgage Interest (Multiple 1098s)

This is a big one for taxpayers who itemize their deductions. Each year, you’ll receive a Form 1098: Mortgage Interest Statement from your lender detailing the amount of interest you paid. But what if your lender changes mid-year because your loan was sold? You’ll now receive two (2) Form 1098s, one from your previous lender and one from your current lender. You have to submit or upload both forms to deduct the full amount of mortgage interest paid that year from all lenders, as that number does not carry over to each form! 

Medical Expense Deduction

Another deduction that households that itemize can miss is in years with large healthcare expenses. Different than the self-employed healthcare deduction, taxpayers can deduct eligible expenses that exceed 7.5% of their gross income for the year. This is common in years when you have surgical procedures, undergo IVF treatments, or give birth. These expenses don’t live on any issued tax form, so you have to manually enter them or let your tax professional know.

Filing Duplicate 1099s

If you have a non-qualified brokerage account with a custodian such as Charles Schwab, Fidelity, or Vanguard, you’ll likely receive a 1099 by the end of February detailing any capital gains, dividends, and interest for the year. However, sometimes your custodian receives additional information from the fund companies that requires them to *correct* your 1099. They will then issue you a separate, corrected version of the 1099 in March. Do not upload both to your tax return! Doing so will ultimately double your tax liability as you’ll find yourself paying on duplicate information. 

Misreporting Cost Basis of Restricted Stock Units (RSUs)

Upon receiving RSUs, you’ll likely have the compensation added to your ordinary income for the year on your Form W-2. However, the custodian (the investment company that facilitates your RSUs) will provide you with a tax form called a 1099-B that shows whether you sold any of your stock. The cost basis on this document will likely read $0, which is incorrect. Your custodian will also send you a document called a “Supplemental Information Sheet,” which will list the correct cost basis information for your RSUs. This sheet allows you to properly report it on your tax return and avoid any potential double taxation. 

Backdoor Roth Mistakes

Mechanically, this topic deserves its own post on how to correctly make a nondeductible Traditional IRA contribution and convert it to a Roth IRA. The outputs of Form 8606, which documents this transaction, are rather simple. But for taxpayers who file their own taxes using DIY software, we see recording errors more often than not. Furthermore, making contributions and doing conversions across different tax and/or calendar years introduces an additional layer of complexity. 

Excess Health Savings Account (HSA) Contributions

This isn’t a tax prep error, but rather a coordination error among spouses. When both spouses are taking advantage of their HSAs through their respective workplaces, it can lead to contributions that exceed the household IRS limit. For two (2) reasons, the first being that the combined individual limits are MORE than the household limit. The second being, if one spouse has dependents on their High-Deductible Health Plan, they may already be making the full family contribution. So any contribution (employee or employer) that is added to the spouse’s plan will also exceed the IRS household contribution limit. If you do not catch or correct this, you’ll pay a 6% excise tax year-over-year as long as the overcontributed amount remains in the account or isn’t applied to a future year contribution limit.