I’m a CPA: 5 Things First-Time Filers Often Miss and How To Avoid Them
For most people around you, tax time is just another part of the year. They talk about forms, credits and deductions so casually. But you’re a first-time filer. It’s all new to you, and frankly, you’re terrified you’ll miss something. Instead of lions and tigers and bears, your nightmares are haunted by W-2s, W-4s and 1099s — oh my!
You don’t have to live in fear. There’s a first time for everything — including filing your taxes — and once you know what you’re likely to miss, you can avoid common errors. MoneyLion can’t help you breathe into a paper bag, but we can connect you with Kevin Golden, CPA, a partner at James Moore & Co. He has advice on what first-time filers should look out for — and how to avoid costly mistakes.
First, Know It’s OK To Be Overwhelmed
As an experienced CPA, Golden has one thing he wants all first-time filers to know: Filing your first tax return can absolutely feel overwhelming — and that’s OK.
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“The rules are complex, the forms are unfamiliar, and small misunderstandings can lead to costly mistakes,” he said. “I often see first-time filers overlook issues that are easy to prevent with the right guidance.”
Fortunately, he’s here to provide that guidance.
Mistake No. 1: They’re Not Organized
You knew filing your taxes meant dealing with a lot of forms and deadlines, but you had no idea there were so many moving pieces. Keeping track of everything requires organization — something many first-time filers lack.
According to Golden, most of the biggest mistakes filers make — such as “failing to report all income, choosing the wrong filing status, misunderstanding credits versus deductions and assuming withholding automatically guarantees a refund” — stem from poor organization and preparation.
The issue is compounded for people with side hustles.
“Many first-time filers also overlook state filing requirements or miss deadlines for estimated payments if they have side income,” he said. “Organization and early preparation go a long way toward avoiding these issues.”
How to avoid it: Get organized early. Create a checklist of income documents (W-2s, 1099s, investment statements) and keep them in one place. Working with a tax preparer gives you a guide who can walk you through what you need to know and do. Flying solo? There are plenty of online resources — including IRS.gov and tax software help centers — that offer step-by-step guidance.
Mistake No. 2: They Underestimate How Complex the First Year Can Be
Golden says many people underestimate how complicated their financial situation can be in their first filing year.
“They may have multiple income sources, student loans, freelance work or investment accounts for the first time,” he said. “Tax terminology like adjusted gross income, taxable income, and credits versus deductions can feel technical. Without prior exposure, it’s difficult to understand how all the pieces fit together.”
That confusion can lead to missed deductions, overlooked credits or reporting errors.
How to avoid it: In addition to exploring online resources or talking with a preparer, ask people you trust what it was like to file for the first time. You may pick up practical tips — like which documents surprised them or what they wish they had tracked earlier. Those conversations can make the process feel less intimidating.
Mistake No. 3: They Forget To Report Additional Income
Yes, you drove for Uber a few weekends a year, but surely you didn’t make enough to report it — right? This is an all-too-common mentality among first-time filers, who often fail to report income from freelance or gig work.
Golden adds that this isn’t the only type of income first-time filers forget. They also miss investment income such as dividends or capital gains, interest from savings accounts, and online platform earnings.
“Even small amounts reported on a 1099 are also reported to the IRS, so omitting them can trigger notices,” he said.
The IRS receives copies of most income forms directly from employers and financial institutions, which makes discrepancies easier to flag.
How to avoid it: Report the income, even if it seems minor. Golden also encourages first-time filers to understand the difference between tax forms from a traditional job and other income sources.
“A W-2 employee has taxes withheld throughout the year, while a 1099 contractor is responsible for paying their own income and self-employment taxes, often through quarterly estimated payments,” he said. “Not understanding this difference can lead to underpayment penalties.”
Mistake No. 4: Assuming You Didn’t Earn Enough To File
After reviewing your finances, you may find your income is below the filing threshold. Before assuming you don’t need to file, Golden suggests taking another look. In some cases, it still makes sense — or is required — to file.
“Some taxpayers qualify for refundable credits such as the Earned Income Tax Credit, which can result in a refund even with minimal income,” he said. “Additionally, if taxes were withheld from wages, filing is required to claim that refund. Failing to file when required can result in penalties and interest.”
Filing can also establish income records that may be useful for financial aid applications or loan approvals.
How to avoid it: Ask a tax preparer — or review IRS filing requirement guidelines — to determine whether filing is in your best interest, even if you believe you fall below the threshold.
Mistake No. 5: They Choose the Wrong Filing Status
Golden commonly sees first-time filers choose the wrong filing status — which can affect tax rates, standard deductions and eligibility for certain credits.
“For example, some individuals who support a dependent may qualify for Head of Household, which offers a larger standard deduction and lower tax rates than filing single,” he said. “Selecting the correct status can significantly impact the outcome of a return.”
How to avoid it: It's easy to say "pick the right status," but determining which one applies can be nuanced. Review the IRS definitions carefully or consult a qualified tax professional to ensure you select the status that reflects your situation.
The Bottom Line
Filing your first tax return is a big milestone — and something to be proud of. While it may feel intimidating, most first-year mistakes are preventable with preparation and the right information.
“The best way for first-time filers to avoid mistakes is to start early, keep organized records, understand all sources of income and consult a qualified tax professional when questions arise,” he said. “Filing correctly the first year sets the foundation for better tax planning in the years ahead.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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