Protecting Your Identity This Tax Season: We care about you!
As financial advisors who have helped clients navigate the stressful aftermath of tax identity theft, we want to share some heartfelt guidance on protecting yourself during tax season. We've seen firsthand how devastating this type of fraud can be – not just financially, but emotionally too.
While tax identity theft can be frightening, you have the power to protect yourself. We’ll take you through some essential steps here, that can help keep your personal information safe.
File Early, File Smart
One of the most effective ways to prevent tax identity theft is to file your return as soon as possible. Think of it as claiming your spot in line – once you've filed your legitimate return, it becomes much harder for fraudsters to file a false one in your name. We encourage our clients to gather their tax documents as they arrive and begin the filing process early rather than waiting until the deadline approaches.
Guard Your Social Security Number Like a Treasure
Your Social Security number is the key to your tax identity. Never carry your Social Security card in your wallet or purse unless absolutely necessary. When someone asks for your SSN, don't be afraid to ask why they need it and how they'll protect it. You wouldn't hand over your house keys to a stranger, so treat your SSN with the same level of caution.
Create Strong Digital Defenses
In our increasingly digital world, protecting your online presence is crucial. Use strong, unique passwords for all tax-related accounts. Enable two-factor authentication whenever possible. In the moment it can feel like a hassle but think of it as putting an extra deadbolt on your front door – that small effort can make a huge difference in keeping intruders out.
Watch for Red Flags
Pay attention to warning signs that someone might be using your information:
- Multiple tax returns filed under your SSN
- IRS records showing income from an employer you don't work for
- IRS notices about tax returns you didn't file
If you spot any of these signs, don't panic – but do act quickly. Contact the IRS Identity Protection Specialized Unit and file Form 14039 (Identity Theft Affidavit) if necessary.
Consider Identity Protection PIN
The IRS offers a voluntary Identity Protection PIN program that adds an extra layer of security to your tax filing process. This six-digit number helps verify your identity when you file your return. It's like having a unique key that only you and the IRS know about.
Protect Your Digital Tax Records
If you store tax documents on your computer, make sure they're in encrypted files. Back up your records securely but be careful about where you save sensitive information. Cloud storage can be convenient, but make sure you're using a secure, reputable service.
What to Do If You Become a Victim
If you do experience tax identity theft, remember that you're not alone and there are clear steps you can take:
- Respond immediately to any IRS notices
- File Form 14039 with the IRS
- Contact your financial institutions
- Freeze and place a fraud alert on your credit reports
- File a complaint with the FTC at identitytheft.gov
Looking Out for Each Other
We’re all in this together. If you have elderly parents or family members who might be more vulnerable to scams, help them protect their information too. Have conversations about security, help them set up good practices, and be there to support them during tax season.
Remember, taking these precautions isn't about living in fear – it's about being prepared and proactive. We want you to feel confident and secure when managing your taxes. If you ever have concerns or questions about protecting your tax identity, please don't hesitate to reach out for guidance & have the discussion with your tax professional.
Stay safe, stay vigilant, and know that there are professionals who are here to help you navigate these challenges.
For more information, visit https://www.irs.gov/identity-theft-fraud-scams/identity-protection-tips
P.S. Remember, if something doesn't feel right about a tax situation, trust your instincts and seek professional help. It's always better to be cautious than to deal with the aftermath of identity theft.