Targeted next generation sequencing platforms have been increasingly utilised for identification of novel mutations in myeloid neoplasms, such as acute myeloid leukaemia (AML), and hold great promise for use in routine clinical diagnostics. In this study, we evaluated the utility of an open source variant caller in detecting large indels in a targeted sequencing of AML samples. While we found that this bioinformatics pipeline has the potential to accurately capture large indels (>20 bp) in patient samples, we highlighted the pitfall of a confounding ZRSR1 pseudogene that led to an erroneous ZRSR2 variant call. We further discuss possible clinical implications of the ZRSR1 pseudogene in myeloid neoplasms based on its molecular features. Knowledge of the confounding ZRSR1 pseudogene in ZRSR2 sequencing assays could be particularly important in AML diagnostics because the detection of ZRSR2 in AML patients is highly specific for an s-AML diagnosis.