There are actually four “tax times” throughout the year, but for most people April 15th is “THE tax time.” It can be a very stressful time of year and the last thing you need to worry about is identity theft. While figuring out if that new pair of shoes could be a “business expense” may have you pulling your hair out, taking some simple precautions can help you avoid having your identity stolen.
- Be selective about who works on your taxes. Investigate tax preparation companies with the Better Business Bureau. Remember that anyone can set up a website posing as a tax preparer. Trust your impressions. If you feel uncomfortable, or doubt the firm’s commitment to protecting your privacy, take your business elsewhere. The phrase “buyer beware” especially applies to “online tax preparers.” Who are these people? What do you know about them? Are they really a company or legitimate accountant or is it a scam to gather Social Security and account information from you? You should be able to communicate with the tax preparer and ask them questions. Ask the preparer how your information will be stored. How many years have they been in business? Will your information be encrypted? What computer security software is used? Who has access to the information you provide? Has the person working on your taxes undergone a thorough background screening?
- Keep your private information private. Avoid doing financial business in supermarkets, or other public concession booths, where others may hear or see your transaction. Those mini offices are not soundproof – and criminals have been observed using binoculars or shoulder surfing to gather information. When filing online you need to realize that others can see your screen too. Go some place where you have privacy.
- Stay on the lookout for tax scams. If you receive an email asking for your Social Security number or financial information, delete it or send it to the FTC at email@example.com for investigation. The IRS does not send emails stating you are being electronically audited or that you are getting a refund. If you have any questions about an email you received from the IRS immediately call the IRS Taxpayers Advocates at (877) 777-4778.
- Handle your own information correctly. While preparing your tax return for filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, burn the file to a CD or flash drive and remove the personal information from your hard drive. Store the CD or flash drive in a lock box or safe. If working with an accountant, you should query them on what measures they take to protect your information.
- All cybersecurity rules still apply. Be sure your security software is up to date and thorough. Double check your URLs to be sure that they are correct so you don’t enter your information on a rogue site. Only use “secure” sites when entering information. You can identify these sites by their inclusion of https in their URL rather than just http.
While filing your taxes online may make life a little easier, the above extra precautions need to be taken in order to help protect yourself against ID theft. Make sure that finishing your taxes is a time to celebrate, not a time to start worrying.