Taxes
February 10, 2016

Protect Yourself from Identity Theft This Tax Season

Simple. Thrifty. Living.

When you think about identity theft, you probably imagine someone using a stolen credit card or Social Security number. What you might not think about is filing your taxes.

Identity theft has become an increasingly large problem for the IRS and people filing their taxes. In fact, it has gotten so bad that fraud accounts for about $21 billion of tax refunds. This tax season, take these four steps to protect yourself from identity theft.

Phishing is a kind of scam where a thief tries to get your personal information by pretending to be someone else. In this case, the thief may pretend to be someone from the IRS. Emails may even contain logos and email addresses that look like they belong to the IRS.

The most important thing to remember is that the IRS will not ask you to provide personal information via email or phone. The IRS will always send you a letter before trying to contact you in other ways. If you have not received a letter from the IRS, then you should not believe any emails that you receive. They are almost certainly fake.

If you are concerned that someone from the IRS is trying to contact you, then reach out to your local office or send an email to phishing@irs.gov.

Identity thieves may try to steal your personal information by breaking into your computer. If you keep any private information such as your Social Security number or tax ID on your computer, then you should install security software with firewall protection.

Some popular options include:

Using a strong password will also make it difficult for thieves to access your computer. Strong passwords should include:

  • A combination of uppercase and lowercase letters
  • Numbers
  • Special symbols such as !, + and @

Do not include any words or numbers that have meaning to you, such as your street name, hometown or birthday. The best passwords are random strings of letters, numbers and symbols. The more random it is, the harder it is to break.

It’s easy for hackers to make fake tax preparation software that will send your information to them. In many cases, this software may look legitimate. That’s why you should always use reliable software that you have researched.

Don’t rely on one or two websites to tell you whether software is legitimate. Talk to your friends and read reviews before you use any unknown software.

Identity theft protection performs ongoing monitoring of improper usage of your identity. They check credit reports from the three major credit bureaus every day and notify you if they detect any changes. Most plans include monitoring of unauthorized usage of your Social Security number, credit cards, debit cards, and even suspicious loan activity that can cost you serious money. Often, an identity theft protection service also examines property records, postal address databases, and other public records to track any signs of identity theft. Signing up for identity theft protection is just an added layer of security.

Paying taxes has never been fun, but these days it is actually dangerous. Make sure you follow these tips to protect yourself as much as possible.

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