Tis the season for identity theft!

     Tis the season for filing your taxes. Tis also the season for getting your identity stolen. The U.S. Federal Trade Commission 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. The IRS also reported a huge increase in tax-related ID theft in 2015—about 2.5 times the number in 2014. All this is to say: Identity theft is a problem that’s not going away.

     As is the case with all cybersecurity, the best way to protect yourself from threats of the stolen identity variety is to make yourself aware. By knowing the basic who, what, when, where, why, and how, you’ll be far less likely to fall victim to identity theft. So let’s start from the top.

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, 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.

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. Not filing a return this year? Sorry, 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, 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. But it’s still a serious undertaking. That means your best bet is, you guessed it, 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.

Password protections

• 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.
• Don’t use the same password on all accounts and change them up frequently. The more variation, the better.

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 you do receive a suspicious-sounding email, contact your service provider directly to verify its authenticity. 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.

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, and antivirus software.

     Take these precautions and you can breathe easier through this tax season and the next. That is, until your accountant sends you the bill.

     If you have any questions or comments please let us know! If you are in need of Anti-virus software, we recommend 'Avast! Internet Security' which can be purchased from our site.