Nothing is worse than expecting a large tax refund only to learn that someone has already filed a tax return using your information. Unfortunately, tax identity theft is on the rise, making it essential for taxpayers to protect themselves.
Thieves file your tax return early in the tax season before you have a chance to and have your tax refund deposited to their bank accounts. Here are a few tips to follow to prevent tax identity theft.
1. Be Stingy with Your Social Security Number
To file a fraudulent return, a thief needs to have a valid Social Security number. Only give your Social Security number out on an "as-needed" basis; the more people and companies who have your Social Security number, the higher the chances are that someone will obtain access to it.
Avoid carrying around your Social Security card. It only takes one lost pocketbook or stolen wallet for someone to access your Social Security number. If you have old documents with your Social Security number on them that you need to dispose of, shred them thoroughly before throwing them away.
Store any documents with your Social Security number on them in a secure spot, like a locked filing cabinet or safe.
2. Don't Click on Unfamiliar Links
It's a little jarring to open your email and see an email that appears to be from the IRS. However, you should remember that thieves often send messages that appear to be from legitimate entities.
They want to trick you into clicking on a link or downloading a file so that they can steal the files on your computer or log your keyboard activity. Many people have sensitive documents saved on their computers, like bank statements and prior tax returns.
Remember, the IRS will not contact you via email about tax issues, nor will they request sensitive information via email. This is always done via a letter or an in-person meeting with an IRS agent.
3. Keep Any Passwords for Your Tax Software Strong
If you've been using the same weak password for your tax software account for years, this creates an opportunity for hackers to hack into your account and steal your info. Try to change your passwords for your tax software or filing accounts every 30 to 90 days.
When you change your password, avoid using passwords that are easy to guess or reusing the same password across multiple accounts. Instead, combine letters, numbers, and characters to create a strong, unique password for each account. A password should have at least 12 non-repeating characters for maximum security.
To learn more, contact a resource that offers tax services.