What you need to know about identity theft & tax fraud
Tax filing season is underway and that means identity thieves are hard at work trying to steal your refund before you can file your return with the IRS.
All it takes to file a bogus return is a stolen Social Security number – and they are widely available on the black market.
If a thief files a return in your name before you do, they get the refund and you have to work with the IRS to straighten things out – and that can take many, many months. Until things are resolved, you don’t get that refund check.
That's why it's important to file your return as soon as possible to beat the crooks to the IRS. The longer you leave that window of opportunity open, the longer ID thieves have to victimize you.
"We realize that you can't file until you have all of the appropriate documentation, but what we're saying is file as early as you possibly can,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. “Sometimes, we put it off because it's something we don't want to do. Make sure that's not the case. File as soon as you can."
If you file electronically, make sure you use a secure Internet connection. If you mail in your return, do so at the post office.
One more important tip: Some people boost their withholding during the year, so they'll get a big refund check. They see it as forced savings. Of course, that money does not make any interest while Uncle Sam has it.
Velasquez cautions that withholding too much has another downside. Should you be victimized by an ID thief and that refund in withheld until the IRS investigates, what are you going to do to compensate for that money you don’t get?
A better way to save is to pay what you owe in federal taxes, or slightly less, and put the extra money into a savings account each month.
More Info: It’s Tax Time…Tips To Protect Your Identity