For many, a new year is a time for a fresh start, but it’s also the start of tax season.
Although the actual tax due date seems a long way off, starting early can save you headaches later, according to the Better Business Bureau.
Scams are also common during tax season. The #1 scam to watch out for is identity theft. This happens when a scammer uses a person’s social security number and other personal information to file a tax return on their behalf to collect their refund. Often, consumers don’t realize they are being victimized until they receive written notice from the IRS that someone else has already filed a return.
“The easiest way to avoid a tax scam is to file as soon as possible, so scammers don’t have a chance to use your information and file before you do,” said Lisa Frohnapfel, president and CEO. from the leadership of the Better Business Bureau Serving Western Michigan. noted. “It is always important to protect your personal information; however, filing early can help protect your tax return.
Another popular scam involves impersonating the taxman. Scammers call, email, or text pretending to be from the IRS. They pressure a person to provide personal information or payment. They can claim that a person owes money and needs to pay immediately by prepaid debit card or bank transfer. If a person does not comply, the scammer threatens them with arrest and fines.
To help combat these and other scams, the BBB Serving Western Michigan has suggestions to help people avoid falling victim to them and file their taxes safely.
One of the best ways to avoid problems is to file your tax return as soon as possible. It cannot be stolen if you have already deposited it.
The BBB also reminds people that the IRS does not initiate contact with taxpayers via email, text or social media to request personal financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.
The BBB also said that if a person should, the IRS would give them the opportunity to ask questions or appeal. The BBB said the IRS will never demand immediate payment, require a specific method of payment, or ask for credit or debit card numbers over the phone. The pressure to act quickly is a red flag that this is a scam, according to the BBB.
Write down your IRS Identity Protection PIN before you file your tax return.
The BBB said victims of identity theft and others can be given a six-digit number that will be used to confirm their identity, along with your Social Security number. But, once you have requested a PIN, you cannot opt out and must use the PIN each year you file your federal income tax return. You will receive a new PIN each December by mail, according to the BBB.
In e-filing, the BBB said a person must be sure to access the real IRS. To do this, visit irs.gov and make sure the lock symbol is in the browser window, which means the website is secure and safe to enter personal and sensitive information.
The BBB also said a person should only deal with a trusted statement preparation service.
Finally, if someone is a victim of tax identity theft, they should contact the IRS at 1-800-908-4490. They should also file a complaint with the Federal Trade Commission at ftc.gov/complaint or by calling 1-877-FTC-HELP. The FTC also offers a personalized identity theft recovery plan at identitytheft.gov.
Michigan taxpayers can begin filing personal income tax returns starting Jan. 24, according to the Michigan Department of Treasury.
Individuals can file their state tax returns online, with a tax professional, or by mailing in paper forms and documents. All Michigan state income tax returns and payment of any taxes owing must be received by April 18.
All employers are required to mail the previous year’s pay stubs – W-2s and 1099s – to their employees by January 31. Year-end pay stubs should not be used when filing a state tax return, as they generally do not accurately reflect all income received.
Taxpayers who rush to file without all the necessary documents will have to file an amended return later, according to the Treasury Department. State tax returns filed without the required documents will be put on hold for further processing and review.
For more information on Michigan personal income tax, go to www.michigan.gov/incometax.