As 2015 comes to a close, and getting ready for your taxes ramps up, an important development is the new IRS campaign: "Taxes. Security. Together." It is designed to raise awareness to better inform you about the need to protect your tax and financial data -- and most importantly provide ways to help you protect your tax refund. Last year after the holidays, the IRS said that one of the biggest challenges they faced was identity theft including tax refund theft.
To help combat identity thieves, the IRS, States, and the tax industry formed an even stronger partnership than before and added even more safeguards to protect your federal and state tax accounts from identity thieves. And although government steps and new safeguards are part of the new and increased effort to protect Americans, the other critical point is you and the actions you can take to protect your information.
Now, while you are gathering up your documents for your taxes, is the time to start a routine to protect your tax and financial information. One of the best ways to protect your tax return information is to file your tax return as early as possible, and for most people that starts around mid-January. If you file your return first, an identity thief won't be able to -- once a Social Security Number is used to file a tax return, another tax return cannot be filed with that same Social Security Number-at least not easily. In addition to filing your taxes early, there are many other things you can do to help protect your tax and financial identity, such as:
- Reconciling your credit card and bank statements.
- Reviewing your credit reports at least once a year. Visit annualcreditreport.com to get your free reports.
- Responding to letters from the IRS, bank, or credit card companies quickly as they often detect fraud before you do. Warning signs of tax-related identity theft can include IRS notices about tax returns you did not file, income you did not receive, employers you've never heard of or places you've never worked.
- Review your annual Social Security income statement for income reported. You can sign up for an electronic account at www.SSA.gov.
- Shred important documents once you've checked them for accuracy.
- Sign up for electronic deposits and statements wherever possible.
- Do not use the same password for multiple accounts.
- Use a password with numbers, letters, and symbols.
- Change your password often.
- Always use security software with firewall and anti-virus protections.
- Set security software to automatically update.
- Encrypt sensitive files such as tax records you store on your computer.
- Do not store your tax return and files on your company main computer.
- Do not leave copies of important tax documents on the printer or copier.
And though it may seem silly, many people still seem to fall for the scams of cybercriminals despite the warnings. Unless you contact them first, neither your credit card nor bank -- or especially the IRS -- will send you emails or call you asking for sensitive personal and financial information such as asking you to update your account -- they simply do not do it. NEVER give our personal information such as passwords or Social Security numbers, even if you receive a seemingly legitimate email, call, or text. Avoid phishing scams, do not click on links, or download attachments unless you know who it is from and what it is -- even those from known sources can be a virus.
To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.
Your identity is your most valuable personal asset. Your tax return and tax refund is typically the largest financial transaction you enjoy each year. Use some of the ideas in this blog to keep your tax and financial information safe, and file early to help keep your big tax refund safer too.