Consumer Reports says there are significant advantages to filing your taxes early. You'll not only get your refund back sooner, but it can help you avoid a tax scam.
Peggy Shea and her husband were victims of a tax scam that is on the rise.
"Last year when we filed our taxes, the IRS had flagged our account because someone else had filed a phony return under my husband's Social Security number," Shea says.
It was an attempt to steal their refund.
"Filing your tax return early is a great way to thwart this kind of a scam. You get your paperwork in early before a criminal can file in your name," says Toby Stanger of Consumer Reports.
Filing early has other advantages. For one, you'll get your refund sooner. About two-thirds of Americans do get a refund, which averaged about $2,700 last year.
Filing early is also beneficial if you owe taxes, so you know exactly how big the tax bite will be.
"That way, you'll have plenty of time to figure out where the money is going to come from or to set up a payment schedule. This year you have to pay by April 18, and you don't want to be late and incur any penalties or fines," says Stanger.
Another benefit of preparing your taxes early: You may be able to get a better deal on college financial aid. Early applicants often get more money.
If you file early, don't rush through it. You still need to be accurate. That avoids having to amend the return later, which could trigger penalties and fines.
If you've been the victim of identity theft, you can get a special PIN number from the IRS that will protect you against future tax fraud.
Victims of identity theft can request the special PIN by going to IRS.gov and filling out the identity- theft affidavit. You'll find more about how to avoid being a victim of a tax scam and how to save money on your federal and state tax returns on our website.
All Consumer Reports Material Copyright 2016. Consumers Union of U.S. Inc. ALL RIGHTS RESERVED. Consumer Reports is a not for profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit consumer.org
Consumer Reports: Why File Taxes Early
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