It’s March, the days are flying by, and already we are over one sixth of the way through the year. For those who don’t already know, the income tax return deadline for this year is the eighteenth of April, and estimates show it is expected that over 240 million tax returns will be filed. Of those, approximately 20% could be fraudulently filed using someone else’s information.
Sound a little scary? It should. But there are ways to prevent you from becoming one of the victims. Here are five tips to help you prevent tax identity theft from happening to you.
1 Shred Your documents
Before you throw away any personal or household documents, including invoices and tax returns, stop. Instead of trashing it, shred it. If you don’t own a shredder, you can invest in one for a reasonable price, usually around $35.00, at any discount store. It’s worth the investment and a small price to pay compared to the high cost of cleaning up your credit after you’ve been targeted by a thief. However, if you can’t afford to buy a shredder, maybe you could simply use scissors to cut up those identifying documents, if you don’t have too many.
Do you throw away those annoying and plentiful credit card offers you receive in the mail? Just because you aren’t interested in another credit card, someone else might go through your trash and take a card out in your name. Instead, run them through your shredder to ensure your information stays private and protected.
2 Protect Your information
Be very careful who you give out any of your personal information to, and make sure anyone asking for this information truly needs to know it. This includes not only your social security number, but also your date of birth, address, and telephone number, along with any other information that identifies you. Some thieves can figure out your social security number using your date of birth and address.
Watch out for con artists and scams. A legitimate bank or credit card company, for example, will not need you to verify account numbers, etc. They should already have this information.
Keep your information in a secure location. If you keep paper files, keep them locked in a file cabinet and not simply laying around for anyone to see. Consider purchasing a locking mail box to prevent anyone from stealing or tampering with your mail.
3 Know Your Tax Preparer
This one nearly speaks for itself. However, make sure the person you have trusted with your financial data and your social security number for tax filing purposes can be trusted. If you are using a tax preparer, ask how long they have been in business. If they haven’t been in business very long, or you know nothing about them, you might be better off choosing someone else. Never sign a blank return! Review your return with your preparer before you sign it.
4 File Early
There are a several reasons to file your taxes early. Not only will you receive any refund due you in a timely manner, but filing earlier gives thieves less of a chance to cash in on a fraudulent claim using your information.
5 Protect Your Electronic Information
Many people have computers these days. Be cautious when entering any identifying information online, including any financial information. Install firewalls to protect your data from falling into the hands of those who would use it to gain access to your financial or personal information. Don’t click on any suspicious emails if you don’t know who it is coming from: They could be phishing for information to gain access to your financial information. Also, don’t send any information by email or text from your phone or computer.
Change your computer and phone passwords often, and don’t give them out to anyone. Don’t allow your computer or phone to save any passwords automatically. If you must write down any passwords, keep the where other’s do not have immediate access to them.
Hopefully the above tips have provided you with some information that will prevent you from becoming a target of tax identity theft. You can also connect with a Tax Advisor from Block Advisors to learn more about how to prevent tax identity theft.