You're already worried about identity theft. And you're probably worried about your taxes as well. As it turns out, if you're planning on e-filing your tax return, you might have to worry about someone stealing your data to file a fraudulent tax return.
If you've already e-filed, you may want to confirm with your tax-preparation company or the IRS that only one return has been filed with your Social Security number on it. If you've yet to file, here are a few ways to protect your personal data when e-filing your return:
1. Secure Your SSN.
Most fraudulent tax returns were filed with a stolen Social Security number, the theft of which is distressingly easy. While the worry with SSNs was having your Social Security card stolen from a wallet or purse, now we use the numbers more frequently and online.
We give out our Social Security numbers to employers, health care providers, and even cable companies, so it's no surprise they would targets for hackers. Hackers stole around 6 million Social Security numbers last year, and fraudsters don't need much more information than that in order to file a tax return in your name.
Give out your Social Security number as little as possible, and only use the last four digits when you can. And you should probably find a safe place to store your Social Security card, rather than carrying it around with you.
2. Protect Past Returns.
It's good practice to keep records of our past tax filings, but these can be another source of personal information that identity thieves can exploit. If you're keeping paper copies of previous returns, make sure they are secure. And if you're tossing out old returns, it's best to shred them to avoid exposing your data.
3. Use a Trusted Preparer.
Admittedly, when one of the largest e-filing companies is facing allegations that it allowed online bandits to file millions of fraudulent tax returns, it's hard to know whom to trust. It may help to keep an eye on the news, but ultimately, the convenience of filing our taxes online comes with the risk that criminals will exploit that ease.
4. Report Fraud.
As noted above, confirm with your tax preparation company and the IRS that no other returns have been filed using your Social Security number. If you do discover that someone else has filed a fraudulent return, report the fraud immediately. The Department of Justice is aggressive in prosecuting identity theft and tax fraud cases.
5. Monitor Your Credit Report.
You can check your credit report for free, and it may be your first indicator that someone has stolen your identity or filed a fraudulent tax return. Even if your tax filing went smoothly, you should be diligent about protecting your identity online.
We all love the convenience and time-saving aspects of e-filing for our tax returns. And while e-filing companies can help us file our taxes, it's up to us to protect our personal data.
- 3 Tricks Identity Thieves Use During Tax Season (FindLaw's Law and Daily Life)
- FTC: 4 in 10 ID Theft Cases Involve Tax Fraud (FindLaw's Common Law)
- DOJ Files Suit Against Fraudulent Tax Return Preparation Services (FindLaw's Common Law)
- Detecting Identity Theft (FindLaw)