With news of the recent IRS data breach and reports that the agency paid out billions of dollars in fraudulent tax refunds, it’s no wonder people are shaking their heads when it comes to tax refund fraud and identity theft. But this type of fraud is a concern year-round, not just something to think about at tax time.
To be sure, preventing this kind of fraud is especially important between Jan. 1 and April 15 because that is when tax documents begin to arrive in the mail. Plus, that’s when most people start thinking about filing their returns. Unfortunately, identity thieves think about tax returns long before then. These post-tax season tips can help you stay vigilant about identity protection throughout the year.
1. File as Early as Possible
If you start prepping your documentation before Jan. 1, you can file your return as soon as all the pieces of information you need are in hand. Identity thieves love it when people wait until April to file their taxes because it gives them several months to collect legitimate taxpayers’ returns. Beat the crooks to the refund finish line by filing early.
2. Monitor Your Accounts Closely
If your personally identifiable information has been compromised, start monitoring your financial accounts more carefully. You have more reason than ever to keep a close eye on your identity, including your return. Just because a thief hasn’t opened a new credit card or bought a car under your name doesn’t mean you’re out of the woods.
3. Check Credit Reports & Insurance Statements
New lines of credit or even just attempts at opening accounts could indicate that a thief is already using your information. Be sure to take a close look at your medical insurance statements to see if there are any unauthorized medical treatments, which can be a sign that an imposter is using your identity. You can get your credit reports for free every year from each of the three major credit reporting agencies through AnnualCreditReport.com. (You can also get a free credit report summary, updated every 14 days, on Credit.com to watch for important changes.)
4. Review Your Tax Documents
Finally, before handing your tax documents off to a preparer, closely review your W-2 forms and note the income earned. If the amount is far higher than you think it should be, someone may have used your Social Security number to obtain employment during the year. That means your taxes will be higher than they should be. It also can mean that someone has your SSN and isn’t afraid to use it.
If you do have reason to think your sensitive personal data is “out there,” you can file a form with the IRS that will raise some red flags on your tax return. It might mean that your legitimate refund is delayed slightly, but that’s a small consideration when you think of it falling into the hands of a thief.
Tax time is an easy reminder to keep an eye out for suspicious activity, but throughout the rest of the year, it’s equally important that you’re ready to protect your identity, your information, and even your future tax refunds by securing your data.
More on Identity Theft:
- How Can You Tell If Your Identity Has Been Stolen?
- What Should I Do If I’m a Victim of Identity Theft?
- How Credit Impacts Your Day-to-Day Life