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Five Ways to Protect Yourself From Tax Identity Theft

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April 18th, 2022, is the deadline to file your 2021 taxes, and experts advise filing early ahead of scammers to ensure you get your return and someone else doesn’t. Many people may file their taxes this year expecting a return, only to find out a scammer received theirs. Tax identity theft is when someone uses your Social Security number to steal your tax refund or for work. People often discover tax identity theft when they file their tax returns.

With the significant cybersecurity leaks involving the personal information of millions of Americans being compromised throughout the pandemic, this year’s tax season may be one of the worst ever for tax identity theft. What are five ways you can protect yourself from tax identity theft?

1. Run your credit report before filing your taxes

Your credit report will contain an active address for you and previous addresses. If you see a discrepancy and an unknown address in your profile, you may be the target of a scam. Alert the credit reporting agencies immediately and all companies where you have credit.

2. Select to receive W2s and 1099s electronically

Logging in to employee portals and online financial corporation portals to retrieve tax statements helps to deter mailbox theft and protects your personal information.

3. File early

The sooner you file, the more chance you have to be ahead of scammers who will likely file multiple returns using multiple tax id numbers.

4. Use tax preparation software that uses multi-factor authentication

Multi-factor authentication offers extra security by requiring two or more credentials to log in to your account to prepare your taxes. Your tax professional likely is already using this type of security when they file your tax return.

5. File electronically with a request for Direct Deposit

Electronic filing is faster than paper filing and decreases the chances of your return being stolen from your mailbox. Secondly, select direct deposit into your bank account as your refund option.

consult your financial professional

Tax season can be daunting, but we are here to help! Contact your fiduciary advisor if you have any questions or concerns during this time. We can’t wait to help you!

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