The Illinois CPA Society suggests taxpayers mind these common tax-filing mistakes to dodge issues with the IRS and Illinois Department of Revenue.

CHICAGO, March 31, 2025 – With the April 15 tax deadline just two weeks away, the rush to file federal and state tax returns is on, but racing through preparation might inadvertently raise some red flags with the IRS or Illinois Department of Revenue (IDOR). Here are four areas to watch when preparing and filing your tax returns.

1: Income

Most earned income is reported to both you and the government on the applicable tax forms, like W-2, 1099-B, 1099-DIV, 1099-INT, 1099-K, 1099-MISC, 1099-NEC, 1099-R, and SSA-1099, among others. If the income you report on your federal and state tax returns doesn’t match IRS and state records, you could find yourself receiving information requests or even facing fines. To avoid issues, take your time to ensure all your income forms are accounted for before preparing your tax returns—and confirm the proper totals are entered accurately. Also, remember that there are no forms for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting that income on your own. Keeping thorough records can help you avoid costly mistakes.

2: Investment Sales

Selling an investment is generally a taxable event in the year of the sale. To determine your tax liability, you’ll need to know when you purchased the investment, how much you paid, when you sold it, and how much you sold it for. Financial institutions are typically required to provide this information on Form 1099-B, but there are situations where you might be responsible for providing these details yourself:

• Stocks (including real estate investment trusts) acquired before Jan. 1, 2011.
• Mutual funds, exchange-traded funds (ETFs), and dividend reinvestment plans acquired before Jan. 1, 2012.
• Bonds, derivatives, and options acquired before Jan. 1, 2014.
• Cryptocurrency transactions, which often require self-reporting.

To avoid errors and potential IRS inquiries, maintain detailed records of all investment purchases and sales. Be sure to report all transactions accurately, both those provided on tax forms and any you’re responsible for documenting.

3: Credits and Deductions

The IRS and IDOR scrutinize tax credits and deductions to discourage abuse and unsupported claims. Consider charitable or other itemized deductions, for instance, which could be a red flag if they’re especially large, unusual, or lack documentation. It’s important to keep meticulous records that support any credits and deductions you claim on your tax returns.

4: Incorrect Information

Simple mistakes can create big problems. A mistyped income figure, misspelled name, an incorrect Social Security number, outdated direct deposit information, or a missing signature can all cause problems and delays in processing your tax returns, including rejection.

Before filing, carefully review every field on your tax return for accuracy. Taking a few extra minutes to verify your information can help you avoid unnecessary headaches.

Know Your Deadlines

The final rush to file federal and state tax returns can be stressful, but missing deadlines can be costly. So, remember, for most taxpayers, the key deadlines are:

• April 15, 2025. This is the deadline to file your federal and state tax returns or request a six-month filing extension, as well as pay any taxes owed.
• October 15, 2025. This is the deadline to file your federal and state tax returns if you requested a filing extension. Importantly, even if an extension is granted, any taxes owed must still be paid by April 15, 2025, to avoid penalties and interest.

For Illinois taxpayers, an approved federal filing extension automatically extends your Illinois tax filing deadline. However, if you owe Illinois state tax, you must submit Form IL-505-I, Automatic Extension Payment for Individuals, by April 15, 2025, to avoid late payment penalties and interest.

Taking a few extra minutes to review your tax returns can save you from costly mistakes. If in doubt, the Illinois CPA Society (ICPAS) reminds taxpayers that CPAs, certified public accountants, are ready to help. CPAs are strategically positioned to prepare and file your tax returns and help manage your taxes and personal finances all year long. ICPAS’ free “Find a CPA” directory can help you find the trusted, strategic advisor that’s right for you based on location, types of services needed, and languages spoken. Find a CPA at www.icpas.org/findacpa.