File sooner to avoid the risk of fraud!

Filing season begins January 23rd for the 2016 tax year, and according to Kiplinger filing early is a great way to beat the criminals to your money! You can also do your part to protect future refunds by adjusting your withholdings on your W-4 to avoid overpayment!

How to Beat the Crooks to Your Tax Refund

By KEVIN MCCORMALLY, Chief Content Officer December 2016

Around the Kiplinger offices, I’m often referred to (facetiously in most cases, I think) as the “bad Kevin,” to distinguish me from another Kevin on staff who is held in much higher regard. But, if you want to meet a “Bad Kevin” with a capital B, consider Kevin Brown. He just might be every honest taxpayer’s worst nightmare.

According to the Department of Justice, Brown was just sentenced to 135 months in federal prison after pleading guilty as the leader of a massive identity theft and tax fraud ring. The case involved filing at least 12,000 fraudulent federal income tax returns seeking refunds of at least $20 million. Brown and his co-conspirators fraudulently claimed refunds over eight years, often in the names of people whose identities had been stolen, including the elderly, people in assisted-living facilities, drug addicts and incarcerated prisoners. In addition to being sent to the slammer for more than a decade, Brown was ordered to pay more than $4.5 million in restitution to the IRS.

While Brown is out of the refund-stealing business, there are plenty of other crooks who’d love to get their hands on your tax refund. The IRS is battling hard against them, and with some success. In the first nine months of 2016, the number of taxpayers filing affidavits saying they had been victimized fell by 50%. But still, that meant nearly 250,000 of your fellow citizens reported that they were victims of tax-related identity theft.

Fortunately, the key to the fraudsters’ success also points to a prime way to protect yourself. The IRS says refund thieves typically file their fake returns early in the filing season so the IRS gets the phony forms before legitimate taxpayers have time to file their returns.

So, one of the best ways to protect yourself is to file as soon as possible.

Filing Season Starts January 23

The IRS will begin accepting 2016 electronic returns and processing paper ones on January 23, 2017. The closer you are to the front of the line, the safer your refund will be. So, start collecting your tax information—your W-2s, your 1099s, etc.—as soon as it begins arriving in the mail. Pull together receipts and other information on your itemized deductions as soon as possible.

Once you have everything you need, fire up your tax preparation software or grab your pen to do it yourself ... or schedule time with your accountant, enrolled agent or other preparer. Need extra incentive: Not only will filing as soon as possible protect you from fraud, but you’ll also get your money back sooner rather than later.

The stakes are high. In 2016, the IRS sent out about $320 billion in tax refunds to nearly 111 million taxpayers. The average refund was $2,857. We expect the numbers to be similar for 2016 returns filed in 2017.

Protect Future Refunds

There’s an even better way to protect your tax refund: Don’t overpay your taxes in the first place. If a crook claims a fake refund in your name—but you actually owe money with your return—you won’t have to fight to get your money back. The IRS might be out, but you won’t be.

SOURCE: http://www.kiplinger.com/article/taxes/T055-C000-S001-how-to-beat-the-crooks-to-your-tax-refund.html