Avoid Tax Identity Theft & Take Action

Tax filingFile your taxes yet? Don’t put it off for too long because carelessly rushing through the process can lead to dangerous loopholes.

According to a report recently released by the Federal Trade Commission (FTC), “tax-related identity theft complaints more than doubled to 160,000.”

Even more shocking, says Janet Novak of Forbes.com, is that complaints made to the FTC Sentinel Network aren’t even shared, or accounted for, because of taxpayer privacy laws.

Novak adds that FTC’s network only includes complaints reported to the FTC, state agencies, the U.S. Postal Service, the Better Business Bureau and other private groups.

NBCNews.com contributor Herb Weisbaum explains that the most common way a person can commit tax identity fraud is by stealing a taxpayer’s social security number and filing under his name. When the scammer gets your refund before you file, the process of filing and receiving a refund can be significantly delayed—and stressful.

While it might seem as if you’re powerless to the devastation of this awful crime, you can protect your and your family’s finances from being used in a fraudulent manner. There are various available identity protection solutions that you can test out. If your budget is tight, sign up for a 30-day free trial of the Lifelock identity theft protection service and experience superior protection that monitors threats of ID fraud for you and your family.

Also, Sheryl Harris of the Plain Dealer on Cleveland.com offers the following steps that you can take to protect yourself and your family from this type of identity theft.

Phishing for Trouble

Online predators can access personal information by sending fake emails that say they are from the IRS. Recipients should not respond to these emails and report them to the IRS by calling (800) 829-1040. How can you know for sure that an email is not from the IRS? Forbes.com contributor Peter Reilly says that the IRS only contacts filers by regular mail. Also, if a social media site contacts you and says that they are from the IRS and would like to receive information from you, regarding an audit or return, that is definitely a phishy situation that should set off a fraud alarm.

Create Sophisticated Passwords

If you’re e-filing, make sure that you use a strong password to secure all of your sensitive data and be cautious about who you share it with. The safest passwords are  combinations of upper and lowercase letters, numbers, symbols and characters. For maximum protection, encrypt your passwords and save them to a password storing app like Lock Em password manager.

Protect Your Financial Data

Clear all of the tax information from your hard drive after you file if you keep spreadsheets or quick book records. Save the data onto an external hard drive or thumb drive. Harris suggests that after you are finished filing, secure the data on your thumb drive by storing it in a protected place and ensuring that highly sensitive information is removed.

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