Filing Early and Avoiding Paying In Too Much Tax

Historically there have been a lot of people who like to have too much tax withheld because then when they file their income tax return, they get a big refund. In the past I have always thought this made sense to do if you could and would otherwise not save the money, but these days my thinking is that this may not be such a good thing to do.

The issue is identity theft. If someone gets hold of your social security number it is possible for them to file a fraudulent tax return in your name, with the refund going to the bank account that they indicate on the return. If the IRS processes this return before you file your real tax return, your refund will get tied up.

Because of this, I think that the best thing to do these days is to file your tax return as soon as possible, and avoid paying in too much tax.

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