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Protect your tax refund from crooks and hackers

Protect your tax refund from crooks and hackers
© Karenr | Dreamstime.com

Along with tax season comes a frighteningly easy form of identity theft that can cause you a heap of trouble. Thieves with just a little information about you can file a bogus tax return in your name and claim a huge refund.

While it doesn't always work out so well for the fraudster, the IRS still gives out billions each year in fraudulent refunds. In 2014, for example, it paid out $5.8 billion that it shouldn't have, and that's just the fraud it identified. Unfortunately, this year that could be your money.

Your first clue that thieves have stolen your tax refund is when you try to file your tax return and the IRS rejects it because it already has "your" tax return on file. After that, it's a huge hassle to correct the problem, and you could spend months waiting on your refund. If you were counting on that money, then it's a serious financial hardship.

The best way to avoid an unfortunate episode with your taxes is to file your tax return as early as possible to get it in ahead of the fraudsters. Once you file, their window of opportunity is closed.

However, early filing isn't practical for everyone, so we're going to talk about some other ways to keep your tax return safe during the next few months.

Next page: Critical steps to protect your tax ID
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