Tax season is prime time for identity thieves. Tax ID theft happens when someone steals your personal info to file bogus returns and claim refunds. This crime is booming, so you need to guard your data.
This post explains what tax ID theft is and how to outsmart scammers. Follow these tips to keep your identity and money safe.
Tax ID theft happens when crooks steal Social Security numbers and other personal info. They use it to file fake returns and pocket refunds.
This crime has surged recently. The IRS had nearly 1.6 million cases in 2020 alone. Thieves often target older or lower-income filers. The average loss per person is around $4,000.
Key Takeaway: Tax identity theft involves criminals stealing personal data to file false returns and get refunds, harming millions each year.
Guard your personal data year-round to outmaneuver identity thieves. Here are smart strategies:
Key Takeaway: Safeguard personal information by using secure networks, avoiding sharing in emails/texts, locking up old paperwork, and limiting debit card use.
Criminals send fake emails and texts posing as the IRS around tax time. Don’t take the bait on these phishing scams.
Red flags include asking for personal info over email, threats of penalties, or contact info that doesn’t match the real IRS. Forward suspicious emails to phishing@irs.gov.
Key Takeaway: Watch for phishing emails and texts requesting info or payment. Never provide personal data in response.
Work with a trusted, credentialed tax pro to minimize identity theft risks. Here are vetting tips: Search the IRS directory for credentialed preparers near you. Avoid fly-by-night pop ups.
Ask about their ID protection practices like encryption software and locked file storage. Never sign a blank return. Review finished forms carefully before signing.
Don’t let them file as you. Mail your return directly yourself.
Key Takeaway: Research and vet any tax preparer thoroughly. Look for security measures and proper credentials.
Getting a head start on filing your tax return is a savvy preventive measure. Here’s why you should aim to file as early as possible once you have all your tax documents in hand.
Filing your legitimate return right away, rather than waiting until closer to the tax deadline, allows the real you first dibs on any refund you’re owed. The IRS will have your accurate return already on record when processing refunds. It also leaves less time for scammers to strike before you do.
Though it’s ideal to file as close to January 1st as possible, it’s understandable if you need to wait for tax documents like W2s to come in first. But circle your calendar to file the moment you have all the required paperwork. Don’t fall prey to procrastination.
Beat the last-minute rush and minimize the window for criminal activity by filing your taxes early.
Submit your legitimate return ASAP before thieves can strike. Don’t give them time to make their move.
Key Takeaway: Get a jump on criminals by filing your legitimate tax return as early in the season as possible.
When you file online or access financial accounts, use secure private networks only.
At home, make sure your network password is strong. When out, avoid public WiFi – it’s an easy way for thieves to intercept your data.
Stick to cellular data or VPNs when e-filing away from home. These create a private data tunnel criminals can’t access.
Key Takeaway: Always use private, password-protected home networks or cellular data/VPNs when e-filing. Avoid open public WiFi at all costs.
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Keep a close watch on your credit reports all year. Unusual activity may indicate identity theft issues.
You can check reports weekly for free via AnnualCreditReport.com. Scan for accounts you don’t recognize and follow up on any red flags.
Key Takeaway: Frequent credit report monitoring lets you act quickly on signs of possible tax identity theft.
Tax identity theft can wreck your finances and peace of mind. But savvy steps like guarding data, avoiding scams, vetting tax preparers, filing early, using secure internet, and monitoring credit will help you stay several steps ahead of crooks.
Put these tips into action now and all year long. Stop tax thieves in their tracks and protect your hard-earned refund. With some diligence, you can keep your identity and money safe.