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Consumer Reports finds advantages to filing taxes early

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Consumer Reports says there are significant advantages to filing your taxes early.

Employers have until February 1 to send you your W-2 tax form. And the IRS is already accepting electronic returns with roughly two months from the April deadline to file taxes.

Consumer Reports says there are significant advantages to filing early.

You'll not only get your refund back sooner, but it can help you avoid a tax scam.

Peggy Shea and her husband were victims of a tax scam that is on the rise.

"Last year when we filed our taxes, the IRS had flagged our account because someone else had filed a phony return under my husband's social security number," explained Shea.

It was an attempt to steal their refund.

"Filing your tax return early is a great way to thwart this kind of a scam. You get your paperwork in early before a criminal can file in your name," said Tobie Stanger with Consumer Reports.

Filing early has other advantages. First, you'll get your refund sooner. About two-thirds of Americans do get a refund, which averaged about $2,700 last year.

Filing early is also beneficial if you owe taxes, so you know exactly how big the tax bite will be.

"That way, you'll have plenty of time to figure out where the money is going to come from or to set up a payment schedule. This year you have to pay by April 18, and you don't want to be late and incur any penalties or fines," said Stanger.

Another benefit of preparing your taxes early is that you may be able to get a better deal on college financial aid. Early applicants often get more money.

If you file early, don't rush through it. You still need to be accurate. That avoids having to amend the return later, which could trigger penalties and fines.

If you've been the victim of identity theft, you can get a special pin number from the IRS that will protect you against future tax fraud.

Consumer Reports is published by Consumers Union. Both Consumer Reports and Consumers Union are not-for-profit organizations that accept no advertising. Neither has any commercial relationship with any advertiser or sponsor on this site.

(All Consumer Reports Material Copyright 2014. Consumers Union of U.S. Inc. ALL RIGHTS RESERVED.)
Related Topics:
finance7 On Your Sideconsumer reportsconsumer concernsconsumertaxesproperty taxestax evasionbusinessworking familiesjobseconomyloansidentity theftinvestigationIRS
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