Tax season brings a mix of anticipation and anxiety for many Americans. According to recent data gathered by IPX1031, approximately 33% of Americans delay filing their tax returns. The study, which surveyed about 1,000 residents in January, reflects a concerning trend of procrastination that could have significant ramifications for individuals. Notably, tax professionals emphasize the importance of timely filing, not only for financial reasons but also for protecting oneself from the prevalent threat of tax-related identity theft.
Experts like San Diego-based tax attorney Adam Brewer argue that there are no benefits to putting off tax filing if all your documents are ready. Filing promptly is seen as a proactive measure to ensure that potential tax liability or refunds are addressed without unnecessary delays. The urgency to file on time is heightened when considering the staggering statistics on identity theft. By filing a return early, individuals can mitigate the risk of criminal elements using their Social Security numbers to commit fraud—an increasing concern in today’s digital age.
Tax-related identity theft has been characterized as a “serious problem,” affecting numerous victims as highlighted by National Taxpayer Advocate Erin Collins in her official report to Congress. Victims of identity theft often face complex hurdles in restoring their financial credibility, with the average resolution time extending beyond 22 months. As the Internal Revenue Service (IRS) confirmed more than 15,600 cases of identity theft related to tax returns by the end of February 2024, this number, which saw an increase from approximately 12,600 in the previous year, underscores the urgency of early filing.
Early filing, however, does not guarantee a successful experience. It necessitates that taxpayers possess a complete and accurate return to prevent delays. While many tax forms are available as early as January, others may not arrive until later in the filing period. According to the American Institute of Certified Public Accountants, some critical documentation could take until mid-February or even March to reach individuals. Therefore, even if the intent is to file early, it is crucial to await all necessary forms to ensure completeness.
However, once all documentation is in hand, the minutiae of filing cannot be overlooked. Tom O’Saben, an enrolled agent and director at the National Association of Tax Professionals, advises against the temptation to hastily submit a return. Taxpayers should take the time to meticulously review essential details, such as names, Social Security numbers, and bank account information, to ensure accuracy. This emphasis on careful verification, akin to the adage “measure twice, cut once,” serves as a crucial reminder of the potential pitfalls of a rushed submission process.
The prospect of filing taxes becomes even more complicated in light of recent IRS layoffs, which raise valid concerns about service efficiency. Taxpayers fear that significant personnel cuts within the agency might affect processing capabilities in the upcoming season. However, experts maintain that if taxpayers file accurate returns electronically and utilize direct deposit for refunds, the processing of refunds should remain unaffected. Under typical circumstances, one can expect the IRS to process electronic returns within three weeks.
Potential delays due to corrections or extended reviews pose additional challenges, yet many professionals assert that barring a significant operational disruption, taxpayers should expect a typical filing experience. This expectation fosters a sense of normalcy despite the bureaucratic shake-up within the IRS.
Navigating tax season can be daunting, but the advantages of early filing extend beyond just the possibility of a swift refund. Protecting oneself from the growing threat of identity theft and potential processing delays makes a compelling case for not procrastinating. Individuals must step up and take responsibility for their financial documentation, ensuring that all information is accurate and complete. In a world where financial security is increasingly at risk, timely action is not just prudent—it is essential.