Tis the season for filing your taxes. Tis also the season for getting your identity stolen. The U.S. Federal Trade Commission (FTC) saw a nearly 50 percent increase in identity theft complaints in 2015. Of those complaints, almost half were related to tax or wage identity theft. Hang tough. Identity theft is a problem that's not going away.
What is identity theft?
You've heard the term "identity theft" about a thousand times, but do you really know what getting your identity stolen entails? Identity theft is when criminals steal your personal information, such as your full name or Social Security Number (SSN), to commit fraud, including applying for credit, getting medical services, or filing taxes. There are several different types of identity theft, ranging from stealing your health insurance information to creating phony social media accounts using photos and other personal info. But the most common form of identity theft today is tax ID theft./p>
More about tax ID theft
Tax ID theft happens when criminals use your personal information to file for a tax refund with the IRS. Victims usually learn of the crime after having their returns rejected because their imposters beat them to it. You can still get scammed even if you're not required to file. In addition, you're still vulnerable even if you're not actually due a refund.
And what happens if your tax ID is stolen? Besides saying goodbye to your refund (at least until the identity theft is sorted out), the major cost is to your credit and your time. According to the Identity Theft Resource Center, it takes 600 hours to restore your identity after a theft has taken place. The FTC's new online resource aims to streamline the process of reporting identity theft to the FTC, IRS, credit bureaus, and to state and local officials. That means your best bet is prevention.
Here are a few tips to protect you from tax ID theft.
File as early as possible
Beat criminals at their own game and file your returns ASAP. Filing season typically begins around the second or third week of January and ends on April 15. If you haven't already, go do your taxes!
Monitor credit reports
By law, you are entitled to a free copy of your credit report from the three major bureaus: Equifax, Experian, and Trans Union. In addition, there's a fourth bureau called Innovis that you should check in on. Review your reports annually and look for any suspicious activity.
If filing electronically…
Research online tax service providers to see how secure their systems are. Sites should have password standards, a lock-out feature that blocks users after too many unsuccessful login attempts, security questions, and email and/or text verification.
Never file over public wifi or a network that's not password protected.
When it comes to passwords, the longer the better. A random assortment of letters and numbers is helpful, but if that random assortment is short, there's a better chance that hackers can figure it out. Try disguising familiar phrases using L33t speak or the Vigènere cipher.
Don't use the same password on all accounts and change them up frequently. The more variation, the better.
Never store passwords on your computer. If you need to do it digitally, use an external hard drive or USB and disconnect it from the computer when you are finished.
Watch out for phishing emails
Most identity theft happens through social engineering, and that especially includes email. Throw up an immediate red flag if you receive any email asking to confirm passwords, bank account numbers, or Social Security Numbers. In a statement on their website, the IRS says that it "does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels."
If your bank is requesting updated information, log onto your online banking account and update it there (instead of clicking on the link in the email). If your account does not show need for an update, you'll know the email was a scam.
Take physical precautions
Do not carry your Social Security card with you or write it down on checks. Only give out your SSN if it is an absolute necessity. When filling in forms for organizations, hospitals, clinics, and other companies, leave the area asking for your SSN blank, Some recruiters ask for it, too, and you should try to ensure there's a secure method for sending them important documentation when it's otherwise unavoidable."
Shred bills, credit offers, and expired credit cards to prevent dumpster divers from getting your personal info.
Layer your cybersecurity
Personal information can be stolen by malware such as spyware without your knowledge. The best way to protect against these invisible threats is to tighten up your cybersecurity. Layer defenses with a firewall, antivirus, and anti-malware that includes anti-spyware.
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3640 N. Hwy 87, Pine, AZ 85544