As tax season approaches, individuals face the crucial decision of when to file their returns. While the prospect of a refund might compel some to act quickly, many choose to delay, inadvertently increasing their susceptibility to tax-related identity theft. Approximately 33% of U.S. taxpayers procrastinate until the last moment, as highlighted by a recent survey conducted by real estate firm IPX1031. Experts warn that timely submission is not only a smart financial move but also a critical step in safeguarding sensitive personal information.
Delaying tax filing can leave individuals vulnerable to the ever-looming threat of identity theft. Filing early can help safeguard against the potential risks posed by thieves who might co-opt a victim’s personal data to submit fraudulent tax returns. Adam Brewer, a tax attorney based in San Diego, emphasizes the importance of urgency in filing: “If you possess all necessary documents, do not hesitate to submit your return. There is no advantage in waiting.” This highlights a key behavioral insight: many people procrastinate out of complacency or a false sense of security, potentially placing their financial health at risk.
According to the National Taxpayer Advocate Erin Collins, tax-related identity theft remains a significant threat. Processing times for victims seeking assistance have swollen considerably, with an average resolution time stretching beyond 22 months—a substantial increase from the previous year’s 19-month average. Early filing can act as a protective barrier against such extended complications.
Tax identity theft is a complex issue that creates a domino effect of problems for victims. The 2024 filing season saw the IRS confirm more than 15,600 identity theft returns only through the end of February—up from approximately 12,600 cases in 2023. Victims of this crime often face extensive delays not only in receiving their refunds but also in resolving the fraud itself, resulting in unnecessary stress and financial strain. This is further compounded when the IRS undergoes staffing cuts, as recently seen, affecting taxpayer assistance and service efficiency.
To mitigate the risk, proactive measures are key. Filing as early as possible with accurate and complete information is your best defense against identity theft. However, blindly rushing to submit can open the door to errors. It’s crucial to take the time to thoroughly review all pertinent documents before submission.
While it’s essential to file early, accuracy cannot be overstated. Even the smallest mistake can lead to refunds being delayed or lost in transit. This includes verifying details like your name, Social Security number, and banking information. Tom O’Saben, a director at the National Association of Tax Professionals, advices to adopt a mindset of carefulness: “Measure twice, cut once.” This adage illustrates the importance of diligence before finalizing anything, particularly in financial matters that can significantly impact one’s well-being.
Although many individuals may receive their tax documents in January, others might find themselves waiting until the middle of February or even March for all necessary paperwork. Once you have everything needed, take a moment to double-check it all for accuracy before sending it off. In doing so, you not only ensure smoother processing but also enhance your protection against fraud.
With an apparent wave of IRS layoffs affecting staff, confidence in taxpayer support might wane. However, experts like O’Saben maintain that as long as your return is accurate and electronically filed, your refund process should remain unaffected. Once e-filed, most refunds can be expected within a three-week timeframe. Should errors arise, additional scrutiny may lead to extended processing times, but typically, electronic submissions continue in their usual operational rhythm. Concerns surrounding the IRS’s ability to function without delays may be valid, yet they should not deter individuals from filing their returns timely.
Filing taxes sooner rather than later is not just a financial strategy; it’s a vital step in protecting your identity. By understanding the implications of procrastination, ensuring accuracy in your submissions, and staying informed about systemic changes within the IRS, you can effectively shield yourself from the probable fallout of identity theft during tax season.