Your employer has until February 1 to send you your W-2 tax form. And the IRS is already accepting electronic returns. Consumer Reports says there are significant advantages to filing early. You’ll not only get your refund back sooner, but it can help you avoid a tax scam involving identity theft.
Increasingly, criminals are posing as taxpayers and filing phony returns early in hopes of getting the refund themselves. Filing your tax return early is a great way to thwart that scam. You get your paperwork in early before a criminal can file in your name.
Filing early has other advantages. For one thing, you’ll get your refund sooner. About two-thirds of Americans 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. You don’t want to be late and incur any penalties or fines.
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.
But 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 from the IRS that will protect you against future tax fraud. Victims of identity theft can request the PIN by going to IRS.gov and filling out the identity-theft affidavit.