Nearly three-quarters of filers received a tax refund last year, with an average payment of about $2,800, the IRS said recently – a major influx of money for most households that many Americans depend on.
The IRS is already warning of a "challenging" tax season that promises to bring complications and potential delays for taxpayers. That's largely due to the deluge of unprocessed paper returns the agency is working its way through: At the end of December, the IRS had 6 million unprocessed individual returns – a significant increase from its usual backlog of about 1 million unprocessed returns around the beginning of tax season.
Eric Bronnenkant, head of tax at online financial adviser Betterment, said Americans should file their returns as soon as they're ready in order to help avoid tax fraud, because there's a "huge problem" where fraudsters find someone's Social Security number, illegally file a return on their behalf and claim the refund.
"Any time you get a tax credit and you need to reconcile that when you file, you want to make sure you put the correct number down when you file, otherwise that may delay your return and your refund that you might otherwise be entitled to," Bronnenkant said. "Knowing what payments you got up front and appropriately recording those will go far in reducing some of the friction in filing.
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