5 Tips to Protect Your Identity at Tax Time
Whether you owe money or are expecting a refund, preparing your tax return on your own or hiring a professional, tax time can be, well, taxing. The last thing you probably want to worry about is identity thieves tapping into your financial accounts, opening new lines of credit or committing other types of theft or fraud.
But according to Identity Theft 911, tax season is a prime opportunity for identity thieves. W-2s and other Internal Revenue Service tax forms contain a wealth of information–everything from Social Security numbers to financial account information–that can be a target for resourceful criminals.
Protecting your identity, however, doesn’t have to be difficult. Follow these simple steps to help safeguard your personal information from hackers and identity thieves during tax season.
1. Be vigilant with your information online. According to the IRS, impersonation schemes thrive during tax season. This is when thieves claiming to represent the IRS send emails, make phone calls or send traditional mail in an attempt to steal people’s Social Security numbers or other sensitive personal information. However, it’s important to remember that the IRS says it does not contact people by email or social media, so, if you’re the recipient of any electronic messages, you should know that they are fraudulent. If you suspect that a piece of mail you’ve received is part of a scam, you can visit IRS.gov for information on how to determine whether it is authentic.
2. Keep an eye on your mailbox. While cyber-crime has become many thieves’ preferred method of obtaining personal information, it’s still important to closely monitor your mailbox. All official tax forms are delivered by mail, and some thieves find it easier to simply open someone’s mailbox and steal their forms than figure out Internet passwords in order to reap personal information.
3. Leave your Social Security card at home. According to the IRS, you should not, at any time, carry your Social Security card in your wallet or purse. The card should be kept in a safe place, preferably in a safe-deposit box or another secure location. If your Social Security card is in your wallet and your wallet is stolen, then it’s possible your personal information can fall into the hands of identity thieves. With your Social Security number, a thief can compromise your bank account and open new lines of credit.
4. Be crafty with your password. Refunds from electronically filed tax returns are typically direct-deposited into financial accounts, which can help protect a refund check from being stolen from your mailbox. However, if you e-file, you need to know how to do so safely. One way to protect yourself is by creating a strong user password on the website through which you file your tax return. To ensure Internet security, incorporate a series of numbers, letters and punctuation marks into your password.
5. Know your tax preparer. Fraud rings have been known to front as tax preparation centers. Scam artists prey on the unsuspecting customers of these centers, stealing personal information and sometimes redirecting their tax refunds. According to Forbes, there have also been instances when a corrupt tax preparer has sold a client’s information to a criminal, who then used the information to file for a fraudulent tax return. The bottom line? It’s a good idea to research your tax preparer or accountant and make sure he or she is legitimate and ethical.
In addition to taking steps to thwart tax-time identity thieves, you may also want to consider purchasing identity theft restoration coverage, which can alert you to potential fraud and help you repair any damage to your identity in case you do become a victim.