The time of year that many of us dread is fast approaching: tax season.
The IRS opened up the 2020 filing season for individual filers on January 27, 2020, with the last possible day you can file is April 15, 2020.
Unfortunately, tax fraud still exists, as it was the third most popular form of identity theft in 2018. One of the most common forms of fraud is tax-related identity theft, where someone uses your stolen personal information to file a tax return to claim a fraudulent refund.
In this blog, we are going to get into ways you can protect yourself from tax identity theft.
But First…What is Tax Identity Theft?
Tax identity theft is the use of someone else’s personal information to file a fraudulent tax return or claim tax benefits. This theft is so subtle that it sometimes goes unnoticed.
Usually, the fake taxpayer will file early so that they don’t miss their chance. The taxpayer may not realize what has occurred until they receive a notice from the IRS that there is a problem with their claim.
How Does It Work?
Workers and employees will usually receive their W-2 forms from their employers by the end of January. Many often put off filing their taxes until April. A scammer, who has access to compromised personally identifiable information, takes advantage by filing in the victim’s name. Some tax identity thieves will even steal children’s identities to fraudulently claim them as dependents.
How To Protect Yourself
While completely protecting yourself from identity theft is impossible, there are a few steps you can take to reduce your risks:
Take Extra Precautions With Your Social Security Number (SSN)
While this may seem like the most common-sense tip, it is one of the most important.
Tax identity theft almost always involves a stolen Social Security Number, since the IRS and state tax authorities use this number to identify taxpayers.
Always leave your SSN at home in a safe place, and don’t carry around anything that has the number on it. Also, don’t store your social security number on your phone, in case it gets stolen or misplaced.
Take the proper precautions to ensure your SSN is private at all times, and only give it out when absolutely necessary.
We’ve talked about the importance of creating strong, unguessable passwords. Create a variety of passwords for each individual financial website that you use and don’t allow your computer to automatically save passwords, especially if it is on a shared or work computer. Make sure you change your passwords regularly, and if you have trouble remembering passwords, use a password manager.
Protect Yourself Against Phishing Tactics
Phishing refers to online scams that appear legitimate, but are used as a way of gaining your SSN, banking information, or passwords. Often, they are disguised as your bank or the IRS, or sometimes it might even be masquerading as a work promotion to get you to click on the link. Be wary of random emails you receive and inspect the link before clicking on it.
Reduce Credit Card Solicitations
It’s common to receive pieces of mail that offer you a new credit card, but before you go and throw them away, stop right there.
Information that has your name on it could be used as a step to obtain your SSN. Shredding those pieces of junk mail and getting off the list for pre-approved credit card offers are two ways to protect yourself.
Shred Your Documents
Shredding your documents is one of the most efficient ways to protect yourself from tax identity theft. Shredding your documents – especially financial and tax statements – is the most effective method to ensure your sensitive information is protected.
From on-site to off-site shredding, Tri-State Shredding offers a variety of services to meet your needs. Our shredding services are conducted by our trained specialists and all your information is protected from the moment it leaves your facility.
Contact us today or give us a call at (717) 233-5606.