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Why procrastinating with your tax return could cost you

Taxpayers have until Monday, April 18, to file their 2015 tax returns and pay any tax. But many people will be better off filing much sooner than that. (Andrew Harrer/Bloomberg)
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Taxpayers have a few extra days this year — until April 18 — to file returns and pay taxes.

But many taxpayers may actually want to file their returns as soon as they have the necessary paperwork.

Besides making it possible to get your refund earlier, filing early is still one of the best ways to defend against tax-refund theft, tax pros and security experts say.

“It’s even more important this year to file early,” says Melissa Labant director of tax advocacy for the American Institute of CPAs. “The later they wait, the more they increase the chances of having a criminal file on their behalf.”

Take a look at what happened last year. On Feb. 5, Intuit, the maker of TurboTax, temporarily stopped processing state tax returns after noticing a surge in suspicious filings. Some states later reported that fraudulent activity had multiplied by nearly 40 times — and it was only a little more than two weeks into the filing season.

This filing season, the IRS, state tax officials and tax software providers will share information about suspicious filings to get better at catching fraud as it happens. But as part of their anti-fraud efforts, tax officials are also collecting more information from taxpayers and taking more time to verify identities before paying out tax refunds.

For some consumers that may mean taking a quiz, filling out a questionnaire or submitting their driver’s license number, all additional steps that could delay their tax refunds by days or weeks. By filing returns earlier, taxpayers can give themselves more time to provide the necessary information. (Although some states are holding off on paying out refunds until late February or March, even for taxpayers who file early, in order to have more time to verify returns.)

Also, many taxpayers don’t find out their identities have been stolen until they hit submit on their tax returns and learn that someone else has already filed in their name — and cashed in on a tax refund. After reporting the fraud to the IRS, the local police department and other authorities, the wait for the refund check can last several months. So filing earlier can reduce the chances that a criminal will beat you to the punch in cashing in that check too.