It’s tax time! This year personal tax returns are due on April 18, 2017. In January and February, you will start to receive tax documentation needed to prepare your tax returns. At this point, you may be saying to yourself, “I have plenty of time between now and April 18th to get my taxes done.” While this is true, consider the following two good reasons for completing and filing your taxes early.
Reason #1 – Tax professionals are less busy
If you hire a tax professional to prepare your taxes, tax professionals are significantly less busy at the beginning of the tax season compared to the end of the tax season.
The peak of the tax season will be between March 15th and April 18th. During this time, tax professionals will work long hours to get all tax returns completed by the due date. It’s a crazy time. However, at the beginning of the tax season, tax professionals will start to get busy but not nearly as busy. Your tax preparer will have more time available to meet your needs compared to later in the tax season.
Reason #2 – Identity theft and fraudulent tax returns
This reason is a more important reason to file your taxes early. Consider this situation.
– Your name, birth date and social security number are, unknowingly, stolen
– The scammer electronically files a fraudulent tax return showing a large refund
– The IRS processes the tax return and deposits the refund into the scammer’s financial institution
– Your taxes are prepared and you file your tax return electronically
– The IRS rejects your tax return because the IRS says you already filed a tax return
What can you do now? There are procedures to notify the IRS of the identity theft. This includes paper filing your tax return with Form 14039, Identity Theft Affidavit. Click here more information. It will take the IRS approximately 6 to 8 months to clear up the situation and process your tax return. This includes waiting for a long time to get your tax refund.
However, if you filed your tax return early, then your tax return will be filed first. The fraudulent tax return filed by the scammer will be filed after yours and, therefore, will be rejected by the IRS.
The risk of identity theft has increased over the years. Over past two tax seasons, we’ve had at least one client fall victim to identity theft. Both of these clients provided us their tax information in April and their tax returns were filed right around April 15th. Their tax returns were rejected because a fraudulent tax was already filed.
Related Identity Theft Stories
The IRS was hacked several times over the past two years.
IRS Hacked Again and Tax Scams Continue
Then there was the major hack at Michigan State University where student data was stolen, this includes current students and Michigan State alumni.
Michigan State University Hacked, Student Data Stolen