The benefits of filing early
Do you file your taxes as soon as you receive your tax information? Or are you among the more than 20 percent* who wait until the deadline? For that matter, maybe you even file for an extension. The relevance of when you file has far greater implications than whether or not you’re a timely taxpayer. Considering the prevalence of tax identity theft — a 66 percent increase in 2012 alone — the longer you wait to file, the more time you give thieves the opportunity to file as you. Early in this case means as close to January 31 as possible, though not before that date (per IRS guidelines).
What is Tax Identity Theft?
Tax identity theft occurs when a fake tax return is filed using someone else’s personal information like a Social Security number to receive a tax refund. Other forms of such theft include someone using another person’s Social Security number to acquire a job or claim another person’s dependent. Most alarming, tax identity theft is the number one type of identity theft reported to the Federal Trade Commission (FTC), making it vitally important to the IRS and prompting them to ramp up efforts to combat the crime. It’s also why federal, state and local governments host Tax Identity Theft Awareness Week, January 13-17. Victims of tax identity theft are most likely to discover the crime via a letter from the IRS stating multiple tax returns were filed in the victim’s name or Social Security number. Alternatively, IRS records could indicate a taxpayer’s wages came from an unknown employer. If you receive such a letter, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. The overall goal is to lessen the incidents and impact of tax identity theft by thoroughly educating taxpayers. To better understand your risks and help reduce tax identity theft, visit the FTC (http://www.ftc.gov/idtheft) and the IRS (irs.gov/identitytheft). *Estimate from IRS-related news reports.
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