Identity Thieves Are Ready for Tax Time…Are You?
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Many people don't consider tax season their favorite time of the year, but for identity thieves who are determined to nab your tax refund, the payoffs can make it worth their while. By filling out fraudulent tax returns, they can not only falsify your return and make off with a lot of money, they can prevent you from being able to file your legitimate return on time and leave you with an identity theft mess to clean up.
There are a few things you can do to avoid becoming a victim of this rapidly growing crime, and a lot of it starts with early preparation:
1. Are you already a victim? If you’ve had your identity stolen, you may be at even greater risk of having your tax refund stolen. Think of it this way: once a thief already has your personally identifiable information, there’s little to stop him or her from filing a false return in your name and making off with even more money. If you know you’ve been the victim of an event of this kind, it’s important that you get your tax return filed as soon as possible in order to beat a thief to it.
2. Get your paperwork together. This is the time of year when your documentation will start to trickle in. W2 forms will come from current or former employers, and day care reports or medical statements will arrive detailing tax-deductible expenses. Even your church or favorite charity will send notices of contributions. By having a safe location to keep all of these important forms, you’ll be ready to file as soon as everything is in place.
3. Update your software if you’re going it alone. If you prefer to file your own returns by using tax preparation software, now is the time to make that purchase or update your previous title. There were some key changes this year to how these software titles will operate, including requiring stronger passwords and multi-step authentication, so you’ll want to be familiar with the system and have your profile up-to-date before you try to actually file your return.
4. Ask for credentials. If you’re taking your paperwork to a tax preparer, remember that a number of tax fraud rings have originated with fly-by-night tax preparation services. While there are definitely legitimate tax prep services that don’t maintain year-round offices since their services are only required for a few months each year, some of them are nothing more than identity thieves in disguise. Before turning over any important information, ask for their credentials. If they can’t show you certification through the IRS or they balk at turning over their names, certification numbers, or other pertinent data, something isn’t right.
5. You’re not done just yet…Once the work of filing your return is completed, you’re not finished. You still have to secure all of your documentation in a safe place and shred anything that is no longer needed. Do not leave your information lying around where anyone can see it, and don’t discard anything that contains personal information without rendering it unreadable first. Shred it just to be sure, and making shredding identifiable documents a good habit all year long.
The better prepared you are before you file, the easier the process will be. By maintaining all of your records in a secure place and staying on top of any documentation, next year’s return can be even more secure than this year’s.