February 25, 2016
I know you probably can compile a very long list of things you’d rather do than tackle your 2015 tax returns. But please listen to me: procrastination could cost you big time this year, if you anticipate you will be receiving a refund.
The big risk you face is that if you dawdle and don’t get your taxes filed quickly, there’s a chance a criminal could file a fraudulent return using your Social Security number and pocket a refund. This is not some small outlier problem. In 2013, the Internal Revenue Service paid out an estimated $5.8 billion in refunds to identity thieves. That created a major hassle for people whose identities were hacked: when they filed their legitimate return that entitled them to a refund, their return was put in limbo, because according to the IRS, they had already filed a return and the refund had been paid. I want to be clear: the IRS has a system for people to get their refunds if they are ID theft victims. But c’mon, that takes time, and it is an unnerving hassle.
My advice if you are going to get a refund this year is to get your return filed ASAP. Beat the thieves to the punch! And an even smarter move for the 2016 tax year is to do what you can to not be in line for a refund a year from now. You can adjust your withholding or your estimated tax if you are self-employed.