I can’t stress enough importance of today’s issue. Every year on February 1 the US tax season starts. From that date and through April 15 US citizens and resident taxpayers file our taxes with the government.
Very few of us await this season gladly; maybe tax preparers are the ones who always do.
The rest of us mortals must hang on tenterhooks until we find out if we owe or get money back. That’s life. As the great thinker, scientist and inventor Benjamin Franklin said, in this world nothing can be said to be certain, except death and taxes.
And to make matters worse, I’m here to tell you why this year, above all, it’s imperative that you NOT wait until April to file your taxes, but that you file instead in the next two weeks.
If you read this blog, or just follow the news, you will know that last year saw the largest data breach in US history. Equifax, the credit bureau, suffered the theft of information of almost 15 million consumers, both US citizens and residents. The data stolen had everything: each consumer’s name, address, previous addresses, account numbers, identification data. Everything a scammer could ever wish for, and more.
Here’s a sad fact: If you were one of the victims of the Equifax data breach, your information is now on sale on various dark web sites for about $10 for all of it. It’s rather insulting that they can ruin your good name for ten bucks, isn’t it? The low price is due to the law of
supply and demand: there were so many individual files stolen in the breach that there is data for every scammer, and more. So, the price of our identities has gone down.
A more revealing fact: if your data was stolen from Equifax and you pay taxes in the US, the only way to stop a scammer from hijacking your tax return (they file a fake tax return and get a refund in your name, it’s called tax return identity theft) is to file your taxes before he or she does.
If you’re still not convinced of the seriousness of this situation, let’s look at some numbers
In 2015 the IRS suspended and/or cancelled 4.8 million fake tax returns. They’ve confirmed that they managed to stop the payment of 8 billion fake refunds. Tax return identity theft is the juiciest scam in the US, and it goes way beyond the theft and sale of credit cards, or standard identity theft. That’s because fake tax returns can be filed electronically, using free software, without the need to forge any documents or submit much paperwork and, scammers know that it’s a matter of statistics that some of the returns will go through the initial security checks and that they’ll get a tax refund before the IRS catches on.
The good news is that if you’re one of the plucky ones who has to pay this year, you won’t
need to do it at the time of filing if you heed my warnings and file early. You can file your tax return with an extra form that will allow you to pay later, by April 15 (you can also pay after that date but in that case, you’ll have to pay a fine and interest).
The magic form to file now, pay later is form 1040-V/Payment Voucher. Remember that you will have to file it with your return.
Early tax filing has other advantages: if you’re one of the lucky ones that gets a refund, you’ll get it faster. If you aren’t so lucky, you will at least know what you owe and make plans to come up with that payment by the due date.
Are you a US citizen living abroad?
If you’ve ever lived in the U.S. and had a bank/credit union account, credit cards, or any loans, you have an established credit history with Equifax. This means that your information might have been stolen and, if you want to protect yourself from tax return fraud, the only way is, as I said, to file early.
United States citizens living abroad and whose income exceeds $10,400, must file a tax return anyway. If this catches you by surprise, don’t worry: people who make less than around $100,000 in salary a year must file, but not pay. It’s a matter of showing what you earned, nothing more.
A year ago, I already wrote an article on seasonal tax scams. This year, because the IRS expects a sharp rise of fake tax returns, I wanted to tell you with time. Please, don’t wait. In last year’s article I gave several options on how to file with professional help, online, and several different options that will have no cost to you.
By the way: I'm giving away an OAS FCU desk calendar to whoever happens to live farthest away from me and visits the credit union Facebook page and tells me where they live. It's a silly giveaway but, hey, if you want to receive a letter from Helsinki Finland, go here and tell me from where you're posting. Good luck!
By the way: I'm giving away an OAS FCU desk calendar to whoever happens to live farthest away from me and visits the credit union Facebook page and tells me where they live. It's a silly giveaway but, hey, if you want to receive a letter from Helsinki Finland, go here and tell me from where you're posting. Good luck!
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