There are a number of reasons that I would recommend filing your taxes early. You could always fall back on the most common reasons and say “I spent too much during the holiday seasons and my credit cards are maxed and need to pay my cards off”. You could say “I need the down payment on a car”. You might even say “I’m buying a home and getting my refund sooner will help us”. Although these are great reasons to file your tax returns early, I recommend making an appointment with your tax person and filing early because of the issues with fraud. Over the past few years, it seems that the number of Identity theft victims has risen. The IRS even listed identity theft as a hot topic and is urging taxpayers to help in preventing identity theft and refund fraud.
Imagine this…. Someone has managed to steal your identity through a number of sources, such as email scams and phone calls pretending to be someone working for the IRS. Or maybe someone has managed to steal your identity by phishing or even because of harmless responses on Facebook, MySpace, or other social media. Either way, someone has your information and has filed a fraudulent tax return using your name and social security number. They have received a refund and are long gone. In the meantime you decide to wait to file your taxes until you have a need for the money, the deadline is approaching, or you just plain forgot. The way the IRS processes tax returns is on a first come first serve basis. In other words, the IRS will reject your tax return that was e-filed because someone else has stolen your identity, and filed a fraudulent return. Now your only choice is to file by paper. Because the IRS has already given the money to someone, they are not going to be so quick to give you a refund. For anyone that has filed by paper in the past, you know that it could be a long process.
Besides, why wouldn’t you want to file early and get your refund? Wouldn’t it be better for you to have the money in your bank account, then to have the government holding on to your hard earned dollars?