It’s been some time since Ben Franklin made his famous quip about nothing being certain in life – except for death and taxes. But despite the intervening centuries, it still holds true. And year after year, tax season returns – and with it, hassles, headaches, and frustrations.
While many people put off filing until the last minute simply to avoid facing the inevitable, it’s usually a much better idea to file as soon as possible. Certainly, filing during the early weeks of tax season makes sense if you’re getting a refund; but even if you owe money, filing early can help ensure your return is properly submitted, and it might even help reduce your risks of having your tax return (and the information it contains) stolen by thieves.
Preventing Identity Theft and Tax Fraud
Your tax return contains plenty of personal information, including your social security number, birthdate and address – all of which provide cybercriminals with a gold mine of data they can use to steal your identity, ruin your credit and pretty much create havoc in your life.
Criminals who “specialize” in identity theft are pretty good students of human behavior. They know people are far more likely to file their returns late – and they also know that by concentrating their activities during those hectic months, they could increase their chances of capturing some of that sensitive data.
Tax season isn’t just for “new” incidents of identity theft either. For criminals who already have your name and social security number, filing a return in your name early in the season means they can reroute any anticipated refund to a bogus bank account, making off with the funds before you have a chance to file your own legitimate return. Filing early gives thieves less time to file a fraudulent return, and it may also raise some red flags that can help the IRS track down someone who tries to submit a fraudulent return using your name later in the tax season.
More Common Than You Think
Tax fraud may seem unlikely, but actually, it costs the IRS millions of dollars each year, just in bogus refunds. That doesn’t include the amount of taxpayer money that’s used to combat tax fraud and to track down the thieves – many of whom aren’t caught. And if you are one of the people whose refunds are diverted, it can take months before the IRS can verify your claim and send you your refund.
In addition to filing early, here are four more tips to help you protect your identity this tax season:
- If you file online, log out of the tax site each time you finish working.
- Don’t use public computers to file your return, and don’t share your computer with someone you don’t trust.
- Don’t leave tax forms or personal data (including W-2 forms) in your car or on your desk or other areas at work.
- Shred scratch paper and any other forms or paperwork you don’t need.
- Be suspicious of ANY email or telephone call from the IRS, especially if they ask you to log in to a site or provide personal information. Requests from the IRS for personal information are rare; you can – and should – email or call the IRS directly to confirm the request is from them.
- If you’re due a refund, have it direct-deposited to prevent a check from being stolen in the mail.
Just these few simple precautions can go a long way toward helping you avoid identity theft this tax season.