Tax fraud exists because criminals want to steal your hard earned money, in the form of a tax refund check, before you get a chance to file your tax return.
Sadly, that means many people have to deal with the nightmare of sorting out the fraud with the Internal Revenue Service (IRS).
Trust me, you don’t want to have to do that.
While you will eventually get everything cleared up, why should you have to wait to get your tax refund because the IRS accepted a fake return?
You shouldn’t have to and, in fact, you don’t have to.
Luckily, there is a way to make sure that you never have to deal with the nightmare of sorting out tax fraud before you can get the refund you are entitled to.
Simply Do Not Overpay Your Taxes
The answer is easier than you think. If you don’t overpay your taxes, you’ll never be owed a tax refund. Even if a fraudster files a fake return and gets a refund, you won’t have to wait to get your money because you’ll already have it by paying less taxes to the government throughout the year.
Granted, you’ll still have to sort out the fraudulent tax return with the IRS, but you won’t have to wait to have your hard earned refund.
Figuring How Much Taxes You Owe To Avoid Penalties Isn’t Rocket Science
How on Earth could anyone figure out how to pay in just enough taxes to not owe a penalty and, at the same time, avoid getting a tax refund? I’m glad you asked, because it is easier than most people think.
Thanks to safe harbor rules, you can easily estimate how much you will need to pay in taxes in order to avoid paying penalties and interest due to underpayment of taxes. Simply pay 100% of the amount of tax you paid last year over the course of the current year.
Of course, if you make more money than last year and nothing else changes, you will still have to pay taxes on the additional income, but at least you won’t owe interest and penalties.
However, if your taxable income exceeds $150,000 then the rules are a bit different. You will need to pay the smaller of 90% of your current year estimated tax bill or 110% of last years taxes paid to avoid penalties.
You Can Get More Detailed If You Want
Nothing is stopping you from getting even more detailed with your taxes to make sure you don’t owe a single dollar on tax day. You can collect your information for you income, deductions and credits throughout the year and calculate your estimated tax bill. Simply make quarterly estimated payments to make sure you don’t owe a dime come tax day.
The last quarterly tax payment is normally due January 15th, just in time to top off your tax payments to match your tax bill. Better yet, since you already have all of your information together, you can just go ahead and file your tax return as soon as filing season opens.
Alternatively, if you have already met the safe harbor requirements, you can just wait to pay any tax that is due until April 15th. After all, who likes giving an interest free loan to the federal government.
Never Wait For Your Tax Refund Due to Fraud
By following the steps above, you’ll never have to wait for your tax refund due to tax fraud. Granted, you will no longer receive a tax refund, but you will have additional money available to you throughout the year since you will quit overpaying your taxes.
Criminals keep getting more sophisticated every day. Don’t allow them the opportunity to steal your tax refund. Quit overpaying your taxes starting this year!
Do you normally get a tax refund when you file your tax return? If so, are you worried fraudsters may steal your refund and cause you to deal with the IRS to get things sorted out? Will you be trying this new method in the future to make sure you never have to worry about having your refund stolen? Let me know your thoughts in the comments below!
Photo by: 401(k) 2012 Text added by: Lance Cothern