You took down the tree. You put the lights away. You made your 2016 New Year’s resolutions. You have returned to your daily routine. The holiday season is long over, which means tax season has begun.
While tax season can be stressful for anyone, it can be particularly nerve-racking for the many self-employed, independent contractors and small business owners in Texas. Do I file a personal tax return or as a business? What forms do I need? Did I include everything when I added up my expenses, income and assets? Have I maximized the value of my deductions? Will the IRS audit my return?
As technology continues to evolve and become even more essential to business operations, there is one more question that taxpayers have on their minds. What happens if someone steals my identity and uses it to file a false return?
Tax fraud involving identity theft has become a major issue across the United States. In the year 2014, identity thieves took about $16 billion from approximately 12.7 million unsuspecting taxpayers.
Filing your taxes is stressful. Dealing with tax problems, controversies and the IRS after something happens is an entirely different matter. The process for resolving matters can be long and complicated, causing collateral problems while you work to resolve the issue.
You may have your own opinions about taxes and the IRS, but you would likely take the same stance on one issue. You and the IRS would rather avoid identity theft problems than deal with them.
The agency developed a campaign called “Taxes. Security. Together.” Agency officials designed the campiagn to raise awareness about the problem and help protect taxpayers from identity theft. For the 2016 filing season, the agency has tightened security measures to help reduce the number of potential cases.
What can you do to protect yourself from identity theft? Vigilance is the key. You have to put in a year-round effort to keep your information safe. Recognize that you are a potential target. It is easy to assume that “it won’t happen to you.” Although you hope it won’t, prepare like it will.
Below are five proactive steps you can take to shield yourself from identity theft.
- Be ready for phishing emails and phone scams: When anyone calls or emails you asking for your personal information. Assume that it is an identity thief and take control. For example, if the caller claims to be your credit card company, hang up and call back using the phone number listed on your card.
- Avoid public wi-fi: Retail establishments, like coffee shops, often offer consumers free access to wi-fi. Don’t kid yourself, this is for their benefit. They offer the convenience to help you stay longer or stay loyal. Public is public, which is a huge benefit for identity thieves who can sign in and get hold of your information. It might cost you more now to use cellphone data, but it could save you big money later.
- Don’t be careless with personal information: You should never carry your Social Security card with you or leave papers lying around that have your Social Security Number (SSN) listed on them. Put the card in a safe or safe deposit box. Shred papers with your SSN, credit card number, bank account or other personal information.
- Use security software and strong passwords: Digital data is arguably easier for thieves today to get their hands on than physical papers. Install security software on your computer, such as antivirus and programs that allow you to encrypt saved documents. Always take the warning to “think about a strong password that contains capital letters, numbers and special characters” seriously.
- Keep an eye on your credit card and bank statements:Thieves often test your information on a small scale before they use it on a large scale. Alert your bank or card-company if you notice any unusual purchases, and take the alerts they send you seriously too.
Should you become the victim of identity theft or run into any other tax problem this year, it is crucial you consult a legal professional immediately. Don’t try to handle the situation on your own as you could make mistakes that leave you with an even bigger problem on your hands.
