MONEY identity theft

Woman Accused of Filing 3,000 False Tax Returns in $7.5 Million Scheme

Tax Refund check
B Christopher—Alamy

Allegedly the government isn't the only victim.

An Alabama woman was arrested May 12 for allegedly filing more than 3,000 false tax returns and defrauding the government of millions of dollars in the process, according to a news release from the Department of Justice. The accused, Talashia Hinton, allegedly worked with others who gave her IRS electronic filing identification numbers (EFINs) and stolen personal information so she could prepare the fraudulent returns.

Hinton was charged with one count of conspiracy to defraud the United States, five counts of wire fraud and five counts of aggravated identity theft, according to the DOJ news release. She is said to have received more than $7.5 million in refunds from the fraudulent returns filed in the 2012 and 2013 tax seasons.

The Internal Revenue Service pays out hundreds of billions of dollars in refunds every year, but a $7.5 million scheme in two years is still noteworthy. It’s not clear from the DOJ information how many people were involved in the alleged fraud operation, but Hinton is accused of securing the money. She allegedly directed the IRS to issue refunds by check and through direct deposit on prepaid debit cards.

Schemes like this have ensnared millions of Americans in the past several years, delaying the refunds they’re entitled to by months or years and often complicating their tax-filing seasons for years to come. Usually, victims of tax identity theft do not discover they’ve become a victim until they try to file their legitimate returns, only to be told a return has already been filed for their Social Security numbers. For people who rely on tax refunds to make necessary purchases or pay down debt, the ensuing delay in refund can be extremely problematic.

You may not want to think about tax season for another several months, but if you want to reduce your chances of becoming a victim of tax identity theft, prepare now to file your 2015 taxes as soon as possible next year. The earlier you file, the smaller chance there is a thief will file a fraudulent return in your name before you do.

Keep in mind this is a difficult crime to prevent. If you’ve ever had your Social Security number compromised, you’re at great risk for experiencing this crime, and even if you don’t think any major personal information of yours has been exposed, it’s still important to monitor your identity and accounts for signs of fraud. Not only is it a headache to deal with identity theft and a delayed tax refund, related issues like a shortage of cash flow or other fraud could damage your credit standing. You can get free annual credit reports under federal law at AnnualCreditReport.com and you can monitor your credit scores for for free every month on Credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY identity theft

Why We Need to Kill the Social Security Number

Social Security card with no number
Getty Images

SSNs were never designed to be a secure key to all of our personal data.

While tax season is still producing eye twitches around the nation, it’s time to face the music about tax-related identity theft. Experts project the 2014 tax year will be a bad one. The Anthem breach alone exposed 80 million Social Security numbers, and then was quickly followed by the Premera breach that exposed yet another 11 million Americans’ SSNs. The question now: Why are we still using Social Security numbers to identify taxpayers?

From April 2011 through the fourth quarter of 2014, the IRS stopped 19 million suspicious tax returns and protected more than $63 billion in fraudulent refunds. Still, $5.8 billion in tax refunds were paid out to fraudsters. That is the equivalent of Chad’s national GDP, and it’s expected to get worse. How much worse? In 2012, the Treasury Inspector General for Tax Administration projected that fraudsters would net $26 billion into 2017.

While e-filing and a lackluster IRS fraud screening process are the openings that thieves exploited, and continue to exploit, the IRS has improved its thief-nabbing game. It now catches a lot more fraud before the fact. This is so much the case that many fraudsters migrated to state taxes this most recent filing season because they stood a better chance of slipping fraudulent returns through undetected. Intuit even had to temporarily shut down e-filing in several states earlier this year for this reason. While the above issues are both real and really difficult to solve, the IRS would have fewer tax fraud problems if it kicked its addiction to Social Security numbers and found a new way for taxpayers to identify themselves.

Naysayers will point to the need for better data practices. Tax-related fraud wouldn’t be a problem either if our data were more secure. Certainly this is true. But given the non-stop parade of mega-breaches, it also seems reasonable to say that ship has sailed. No one’s data is safe.

Identity thieves are so successful when it comes to stealing tax refunds (and all stripe of unclaimed cash and credit) because stolen Social Security numbers are so plentiful. Whether they are purchased on the dark web where the quarry of many a data breach is sold to all-comers or they are phished by clever email scams doesn’t really matter.

In a widely publicized 2009 study, researchers from Carnegie Mellon had an astonishingly high success rate in figuring out the first five digits for Social Security numbers, especially ones assigned after 1988, when they applied an algorithm to names from the Death Master File. (The Social Security Administration changed the way they assigned SSNs in 2011.) In smaller states where patterns were easier to discern the success rate was astonishing — 90% in Vermont. Why? Because SSNs were not designed to be secure identifiers.

That’s right: Social Security numbers were not intended for identification. They were made to track how much money people made to figure out benefit levels. That’s it. Before 1972, the cards issued by the Social Security Administration even said, “For Social Security purposes. Not for Identification.” The numbers only started being used for identification in the 1960s when the first big computers made that doable. They were first used to identify federal employees in 1961, and then a year later the IRS adopted the method. Banks and other institutions followed suit. And the rest is history.

In fact, according to a Javelin Research study last year, 80% of the top 25 banks and 96% of the top credit card issuers provide account access to a person if they give the correct Social Security number.

There are moves to fix related fraud problems elsewhere in the world, in particular India where, in 2010, there was an attempt to get all 1.2 billion of that nation’s citizens to use biometrics as a form of identification. The program was designed to reduce welfare fraud, and according to Marketwatch, 160 similar biometric ID programs have been instituted in other developing nations.

In 2011, President Obama initiated the National Strategy for Trusted Identities in Cyberspace, a program that partnered with private sector players to create an online user authentication system that would become an Internet ID that people could use to perform multiple tasks and aid interactions with the federal and state governments. There may be a solution there — but not yet.

The first Social Security card was designed in 1936 by Frederick Happel. He got $60 for it. It was good enough for what it had to do (and was clear that the card wasn’t a valid form of identification). That is no longer the case. That card is nowhere near good enough. Perhaps one solution is a new card design — one with chip-and-PIN technology. Just how something like that might work — i.e., where readers would be located, who would store the information & support authentication, etc. — would have to be a discussion for another day.

The point is, we need to do something.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

More from Credit.com

TIME Economy

How April 15 Became Tax Day

Final Day For Filing Taxes
Erik S. Lesser—Getty Images A man deposits his tax return into a mailbox on the final day for filing taxes in 2001 in Atlanta

The April date has been "T-day" for 60 years

Founding Father Benjamin Franklin famously said that the only things certain in this world were death and taxes, but he wasn’t necessarily talking about federal income taxes. The U.S. didn’t institute such a tax until the time of the Civil War, as a temporary measure. The Sixteenth Amendment, ratified in 1913, made it possible for the federal government to tax individuals directly.

But the story of tax day doesn’t end there. In 1954, Congress passed nearly 1,000 pages of revision to the Internal Revenue Code. Though TIME noted back then that the bill didn’t really change the overall structure of the tax code, and that many taxpayers wouldn’t be included in the categories of Americans who would see a decrease in their tax bill due to the change, it did mean one big difference that every single taxpayer would feel: “T-day” would be moved to April 15:

The lawmakers rewrote and in some places tightened many provisions concerning gifts, trusts, partnerships and reorganized or liquidated corporations. They plugged a clutch of minor loopholes that some taxpayers had found profitable. They switched income-tax day from March 15 to April 15, thus giving the taxpayer an extra month to recover from Christmas expenses and sparing him the yearly ordeal of hearing and reading clichés about the ides of March.

But when 1955’s tax day rolled around, it became clear that — even if the extra month did help Americans’ wallets — the new date didn’t mean an end to tired date-based jokes. The Ides of March were no longer financially deadly but April, TIME noted with no hint of irony, is the cruelest month.

Read the full 1954 story, here in the TIME Vault: The New Tax Law

MONEY Taxes

These Are the People Who Are Most Likely to Get Audited

woman on balcony of modern house
Getty Images The uber-rich have the most to fear when it comes to tax audits.

As tax season draws to a close, you may be wondering if you're at risk. (Hint: Probably not.)

If Tax Day has you worrying about an IRS audit, you probably have little reason to be nervous. Last year, the IRS audited less than 1% of all taxpayers—and the federal agency is on track to audit even fewer people this year.

“The math is pretty simple. There are fewer audits because we have fewer auditors,” IRS commissioner John A. Koskinen told the New York State Bar Association in February. “The IRS lost more than 2,200 revenue agents since 2010. Last year alone, there were 600 fewer auditors, with the total falling to 11,600—the lowest level in more than a decade.”

Still, some Americans are subject to more scrutiny than others. The IRS doesn’t spell out why auditors single out some returns for special treatment, but a look at the agency’s track record provides some clues. Here are the groups that are more likely to get the government’s attention:

1. People who report more than $10 million in income—or none at all

It’s like the old saying about why the bank robber robbed the bank: “Because that’s where the money is.” With limited resources, the IRS takes a harder look at people with the most money (and the most to hide). In 2010, then-commissioner Doug Shulman told the New York State Bar Association targeting the rich was part of a new strategy to “work smarter.”

“This is a game-changing strategy for the IRS,” Shulman said. “Initially, we will be focusing on individuals with tens of millions of dollars of assets or income. Going forward, we will take a unified look at the entire complex web of business entities controlled by a high wealth individual, which will enable us to better assess the risk such arrangements pose to tax compliance.”

In 2014, the IRS audited more than 16% of returns reporting more than $10 million in income. But, as you can see in the table below, single-digit millionaires should take care with their tax returns as well.

Another group with a high-than-average chance of getting audited? People who report no income. If you’re reporting an operating loss on your business, the IRS might double check that you’re being honest. In 2014, the IRS audited 5.3% of the taxpayers who reported no income.

Otherwise, if you—like the majority of American taxpayers—earn between $25,000 and $200,000, you have a better-than-average shot of dodging an IRS audit. Here’s the breakdown:

Returns by Income

Percent of total returns

Percent audited in 2014

All returns 100% 0.86%
No adjusted gross income 1.83% 5.26%
$1 – $24,999 39.08% 0.93%
$25,000 – $49,999 23.32% 0.54%
$50,000 – $74,999 13.12% 0.53%
$75,000 – $99,999 8.33% 0.52%
$100,000 – $199,999 10.70% 0.65%
$200,000 – $499,999 2.87% 1.75%
$500,000 – $1 million 0.48% 3.62%
$1 million – $5 million 0.24% 6.21%
$5 million – $10 million 0.02% 10.53%
Over $10 million 0.01% 16.22%

Source: Internal Revenue Service Data Book, 2014

2. People who file estate tax returns for assets worth more than $5 million

Likewise, a huge estate tax return could raise some eyebrows at the IRS. Overall, 8.5% of estate tax returns were singled out for special scrutiny in 2014, way more than the 0.9% of individual tax returns.

And the bigger the estate, the more likely the IRS flagged the return for an audit. More than 21% of estate tax returns with assets between $5 million and $10 million were audited in 2014, and 27% of returns with assets worth over $10 million were audited.

However, estate tax returns are pretty rare: The IRS received 33,719 in 2013, and only 3,359 of those were for estates worth $10 million or more.

3. People who file international returns

If you’re mailing your return from the Cayman Islands, you can bet that the IRS is onto you. Over the past several years, the IRS has increased scrutiny of international returns.

“On the individual front, we have made putting a big dent in offshore tax evasion a major priority,” Shulman told the American Institute of Certified Public Accountants in 2012. “We view offshore tax evasion as an issue of fundamental fairness. Wealthy people who unlawfully hide their money offshore aren’t paying the taxes they owe, while schoolteachers, firefighters and other ordinary citizens who play by the rules are forced to pick up the slack and foot the bill.”

In 2014, the IRS audited 4.8% of international returns.

But there’s a cost to fewer audits

Law-abiding citizens have little reason to celebrate the limited number of tax audits. Koskinen expects that, thanks to federal budget cuts, the IRS will lose out on at least $2 billion in revenue that auditors would otherwise be able to collect. Plus, sometimes when the government takes a second look at your return, you get more money back: In 2014, the IRS decided 38,029 individual filers had paid too much in taxes and sent them additional refunds.

Related:

MONEY Taxes

450 Billion Reasons Why John Oliver Is Right About the IRS

Last Week Tonight With John Oliver
Eric Liebowitz—HBO/Courtesy Everett Collection

The Last Week Tonight host argues for increasing the IRS's budget. Here's why doing so could save taxpayers money in the long run.

On last night’s Last Week Tonight, John Oliver made news with an argument he acknowledged many viewers might find hard to believe: The Internal Revenue Service, the most maligned of all government organizations, needs more money, not less.

The whole segment is worth watching. (Mostly safe for work, depending on where you work. Maybe use headphones.) But the key point is that the IRS has had its funding cut by about 10% in the last five years, and by nearly 20% if you adjust for inflation. In that same time period, the IRS has also significantly cut enforcement staff.

 

So what if enforcement is weaker? It may mean more people are getting away with paying less than they owe. Every five years, the IRS calculates what’s known as the “tax gap”—the amount of taxes owed minus what is actually paid—and the results are a pretty ugly. The most recent report, produced in 2012 for tax year 2006, puts the tax gap at $450 billion dollars. (The gap shrinks to “only” $385 billion once you take into account late payments and money recouped through enforcement.) Think of it like this: Every dollar someone gets out of paying ultimately has to be made up by the rest of us taxpayers, in the form of higher taxes.

It’s important to note that closing this entire tax gap is likely impossible. The U.S. tax system is build on voluntary compliance, and a very large portion of the government’s losses come from people underreporting their incomes from sources that are hard to verify, such as a self-employed person understating profits.

Detractors have argued the IRS shouldn’t get more funding until it improves its performance. The agency has been rocked by allegations that it targeted conservative non-profit groups in delaying their tax exempt status, and Republicans, like Senator Rob Portman, still harbor deep mistrust toward the agency.

That said, the Treasury Department estimates a $1 investment in the IRS’s enforcement ability returns $6 in revenue, and that’s not counting the deterrent effect on potential cheats, which Treasury says may be three times higher. Finding a way to close just a small portion of the tax gap would save the public huge amounts of money.

Read Next: 3 Ideas That Could Make the Tax System Work Better for Everyone

TIME Television

Watch John Oliver Get Michael Bolton to Sing an Ode to the IRS

Spare the IRS your ire

Tax day is nigh and John Oliver used his Last Week Tonight platform to urge taxpayers not to blame the IRS for their tax day woes — and instead save that ire for Congress.

“The fact is, blaming the IRS because you hate paying your taxes is like slapping the checkout clerk because the price of eggs has gone up,” said Oliver. He noted that if people are angry about the amount of tax they pay, they should blame Congress, who are also responsible for setting the tax rate and for making frequent, confusing changes in the tax code.

Oliver believes that the IRS is unfairly vilified by taxpayers, and their status as the universal scapegoat, gives Congress leeway to cut the agency’s budget, which results in fewer services and longer lines. To encourage people to spare the IRS, Oliver conscripted Michael Bolton to sing a stirring ode to the most maligned agency in the U.S. government.

Read next: Here’s What to Do If You Can’t Finish Your Taxes On Time

Listen to the most important stories of the day.

MONEY Taxes

Here’s What to Do If You Can’t Finish Your Taxes On Time

working father with two kids
Paul Bradbury—Getty Images Too busy to finish up your taxes in the next week? No worries.

The April 15 tax-filing deadline is here. If you're not going to be done by Wednesday night, relax. You have options.

Tax Day is upon us. If you haven’t pulled your documents together or made real progress on your tax return yet, filing for an extension by April 15 sounds like a pretty good idea. That’s what about 12 million people do each year, according to the IRS.

Getting more time isn’t as simple as it sounds. Here are seven things you should know if you can’t make the deadline.

1. You still have to act by April 15. Anyone can file for an automatic extension, but the paperwork is still due on April 15. Filling out Form 4868 will give you another six months to finish, though you can file your taxes any time before October 15. You can file for an extension for free through IRS Free File. Check with your state to see if you need to file a separate application for an extension.

2. If you owe money, you have to pay up. Just because you’re getting an extension, you don’t get more time to pay your taxes. You’ll need to fill out enough of your tax return to come up with a rough estimate of what you owe. Use a tax estimator like the one the IRS provides. Fail to pay, and you’ll be hit with a penalty of 0.5% to 1% of what you owe for each month or part of a month your bill is outstanding.

3. Failing to file is worse than failing to pay. If you simply ignore tax day and don’t file or apply for an extension—and you owe taxes—you’ll be hit with a failure-to-file penalty, which is usually 5% of the unpaid taxes for each month or part of a month your return is late, up to 25% of your bill.

4. Your bank may be kinder than Uncle Sam. You may want to pay your taxes with a credit card if you don’t have the cash on hand. The interest and fees you’ll pay with plastic (roughly 2% of your tax bill) may be less than the interest and penalties you’d face on a late tax payment.

5. You may not need an extension. If you’re asking for an extension just because can’t come up with the money (not because you don’t have your paperwork in order), you’re better of filing your return and paying what you can. You can request a short extension of 60 to 120 days to pay. You will still pay penalties and interest, but at a lower rate.

The IRS also offers installment agreements when you can’t pay your taxes on time. You’ll have to pay a fee to set up the plan—use Form 9465-FS—and you’ll be billed monthly. The IRS must approve the plan, and you can’t stretch out the payments for more than three years.

6. If you are owed a refund, you won’t be penalized for not filing. Of course, you won’t get your refund until you file your return. So why let Uncle Sam hold on to your money any longer than necessary?

7. If you’re a chronic procrastinator, the IRS won’t issue your refund. If you don’t do your taxes three years running, even if you’re owed a refund, the IRS will keep your money.

Related: Watch for the Obamacare tax scam targeting last-minute filers

MONEY Taxes

Is Your Tax Refund Too Big?

massive amount of cash in pocket
William Howell—iStock

Getting a big check from the IRS is exciting, but it might not be the best for your long-term financial health.

Taxpayers getting back money from the government this year have received an average refund of $2,893 so far, according to March 26 data from the Internal Revenue Service. That’s a nice bump up in cash flow, and a lot of people look forward to it as a chance to splurge, pay down debt or add to their savings.

But those people could have had that money all year, had they withheld less of their paycheck. Getting a big refund means you essentially gave the government an interest-free loan, when you could have put the money in a savings or retirement account to earn interest. You may see that money as a windfall, but you should really see it as the government making good on a year-long IOU.

There’s no right or wrong answer to how much of a refund you should aim to get, because it’s very much a matter of personal preference, and it can also be tricky to estimate. No matter how you choose to deal with your taxes, it’s worthwhile to regularly evaluate your withholdings. Here’s why.

Your Life Changes

About 82% of taxpayers receive refunds, but even if you’ve consistently gotten one, a significant life change may affect how much you receive or if you get one at all. Marriage, divorce, the birth or adoption of a child, or a drastic income change should trigger a review of how much you have withheld from your paycheck.

You Should Look for Patterns

Beyond re-evaluating your tax situation in the wake of a noteworthy life event, your tax-filing history will give you a good idea of when you should consider changing how much is withheld from your paycheck. It can be a difficult thing to estimate, because as much as you want may want to avoid owing the Internal Revenue Service in April, getting too much in return may not be the best for your long-term financial health.

“A good place to be is owing a little bit or getting a little bit back,” said Elliott Freirich, a certified public accountant in Chicago. But where exactly is that “good place”? “There’s no right answer. It’s a gray area, but I would tell people if they could kind of keep (their refund) under $1,000. … It’s not like it would go away and they would never have it if they reduce their withholding.”

Know Your Own Saving/Spending Habits

Some people feel that way — that they wouldn’t be disciplined enough to set aside the money they would otherwise get from a large refund.

“It’s sort of like forced savings,” said Jorie Johnson, a certified financial planner in New Jersey. She said she suggests her clients re-evaluate their withholding if their refund exceeds $5,000. “I encourage them to use half of their refund toward their IRA, if they haven’t already maxed it out, and the other half on themselves, as a reward — that’s assuming they don’t have any debt.”

Consider the big picture: Do you look forward to a large tax refund but struggle to meet your savings goals on a monthly basis? If you’re trying to work your way out of debt or regularly find yourself financing your lifestyle while also getting a large refund check every tax season, that’s a sign you need to revisit your withholding (you might need to re-evaluate your spending habits, too).

Remember that withholding is just an estimate of what you’ll owe, and it may take you a few years of consistent tax outcomes to confidently adjust that estimate to meet your tax needs without owing or receiving a large sum come tax time.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Taxes

What It Says About the Economy that People Are Saving their Tax Refunds

saving tax refund
Rene Mansi—Getty Images

It's not necessarily good news that so many are banking their checks from Uncle Sam

This spring, Jes Norman is looking forward to handing her personal financial advisor a bigger-than-normal check: her tax refund.

“I’m investing because I hadn’t in prior years,” says Norman, 28, a project manager for an electronic medical record company. “My tax return is the easiest deposit to give since it’s ‘bonus’ money.”

After a serious medical illness plunged her in debt four years ago, the Rockford, Ill. resident was forced to spend her available cash paying off medical bills. Now her finances are stable enough for her to save her refund.

Retailers looking forward to tax refund season hope Americans with extra cash might be quick to throw open wallets and splurge. But surveys show a higher percentage of adults will be making like Norman this year, and socking away at least part of their refunds.

Fewer Plan to Splurge

tax refunds economy

The average tax refund is up 0.7% this year, to $2,893. And the National Retail Federation’s survey last month of over 6,000 adults across income brackets and regions showed almost half of consumers expecting a refund are planning to save some of what they get back from Uncle Sam.

That is the highest percentage since the trade association started conducting the survey 12 years ago.

Thirty-nine percent of consumers also planned to pay down debt with their refund.

Only 10% planned to make a “splurge” purchase and a quarter said they would use at least some of the refund for living expenses.

A smaller survey by Bankrate.com showed consumers who planned to spend their refund dropped from 7% in 2010 to only 3% this spring. Meanwhile those who planned to save or pay down debt grew from 58% five years ago to 67% today.

Blame the Recession Hangover

This savings trend has been taking off on a national scale since the recession, says Mark Zandi, chief economist for Moody’s Analytics. Before the recession, the savings rate hovered between 2.5 and 3%. Now it’s up to 5.5% and has been on the increase for the last three months.

“American consumers remain cautious,” Zandi said. “I think, in general, consumers are not letting loose.”

Other economic indicators seem to back this up.

Despite strong job growth, several months of increases in personal income and lower gas prices, retail sales dropped 0.6% last month—despite forecasts for an increase of 0.3%. This is the first time since 2012 they have dropped for three consecutive months.

Personal consumption also declined more than expected: -0.2% and -0.3% over the past two months before adjustments for inflation.

And the annualized pace of auto sales fell in February to 16.2 million from January’s 16.6.

Meanwhile consumer sentiment has been slipping during tax season. The index peaked at an 11- year high in January at 98.1 but fell in February to 95.4 and to 91.2 in March’s preliminary forecast.

New York tax professional Alisa Martin, who has clients ranging from low-income freelancers to high-income professionals, also says she has seen a new awareness from clients to save and pay down debt since the recession.

“People are more concerned about savings,” said Martin. “Even people that were good financially before the crash, it dipped into a lot of their savings. They saw accounts really go down. Now they’re trying to get things built back up.”

The NRF survey found that Millennials were even more likely than the general population to save (55% vs. 47%)—which may be owed to their having come of age in tough economic times.

“Perhaps having learned a few financial lessons from their parents during the economic downturn, it appears that Millennials are looking for ways to get ahead,” explains Pam Goodfellow, a director for Prosper Insights and Analytics, the company that administered the poll. “Less likely to be saddled with mortgages and accumulated debt, tax refunds represent the perfect opportunity for younger consumers to invest in their future.”

 

Hear why Millennials are saving more of their refunds

 

Aside from these national trends, Americans may also be affected by more programs promoting savings this tax season. H&R Block, one of the country’s largest tax preparers, announced a new 3-year program to promote savings called “Savings at Tax Time.” The campaign, a partnership with the Consumer Financial Protection Bureau, will encourage clients to save when they come in to get their taxes done.

The bureau also runs a similar campaign at thousands of government-supported community tax preparation sites for low-income Americans.

Retailers Will Lose… But Maybe Not as Much as Expected

The loss in potential spending by Americans is significant. Last year, the IRS handed Americans a total of nearly $65 billion dollars in refund checks.

But even with the increased push toward savings, tax refund season won’t be a total bust for retailers.

“We do know that there are significant spending responses among households when their tax refunds arrive,” said Jonathan Parker, a finance professor at MIT who has studied how Americans tend to spend money they get from government rebates and refunds.

Parker said many studies have shown that people tend to spend a “significant share” of these types of payments—even those who say they’ll save it.

More on taxes from Money 101:

How can I reduce my tax bill?

How do you know if it makes sense to itemize?

What if I need more time to file my taxes?

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