How Your Tax Return is Making You Vulnerable to Identity Theft

Millions of Americas have had their digital identity stolen in the last two years. The Equifax breach was a big part of that process. There are online black markets where your information is sold and bought by criminals. There is no more important time to protect your identity. Tax season is one of the most vulnerable times for your identity. Here is how hackers and thieves can get ahold of your information during tax season, signs that your identity is compromised, and how to avoid it.

How Thieves Get Your Personal Information During Tax Season

There are multiple ways that thieves can get ahold of your information. One way is through email scams. Thieves will present themselves as IRS employees. They give themselves a fancy name, title, and identity to request information from you. They will ask for your personal information such as SSN, date of birth, and location. But the IRS will never request that information from you directly through email, phone or in person.

Another scam they run is W-2 Phishing. Typically, they will hack information from upper management at security-weak companies and then email other departments looking for your information from W-2 statements. This leaves you open to identity theft.

Identity theft is when someone fraudulently uses your personal information, such as your name, date of birth, Social Security number, and address, for their financial gain, including to obtain credit, get a loan, open a bank, or credit card account or obtain an I.D. card.

If you become the victim of identity theft, chances are it will cause severe damage to your finances and your good name, especially if you do not find out about it immediately. Even if you catch it quickly, you can spend months and thousands of dollars trying to repair the damage done to your credit rating.

You can even find yourself accused of a crime you did not commit because someone used your personal information to perpetrate the crime in your name.

Consequently, it is important in today’s electronic age to protect your information as best you can. Unfortunately, there are thieves out there just waiting for you to make a mistake or get careless.

Signs You’ve Been Hacked

One sign that you’ve had your identity stolen is if more than one tax refund has been filed under your name.

Another sign is a call from a collections agency claiming you owe taxes for a year you never filed.

Yet another sign is if the IRS notices that you’ve gotten wages or income from an unknown employer.

Smart hackers don’t get caught. They break into your device, steal everything they can, and finish without a trace. Sometimes they leave a trail of destruction in their wake – malware, weird ads, confused relatives, and even a drained bank account or stolen identity.

It’s pretty easy for hackers to do their job. Most people are ambivalent, but you don’t have to be.

Normally, you get hit by ransomware because you got tricked into running something you shouldn’t have or you were missing a critical security patch. Resolve not to make the same mistakes again.

How to Avoid Identity Theft

The average identity theft victim spends 600 hours clearing their identity. This means getting reports and affidavits proving the theft, figuring out what’s been compromised, and working to get their identity back. That’s a lot of time to spend recovering from a crime of which you were a victim.

The bad news is that you cannot protect yourself 100% from identity theft. The good news is you can greatly reduce your risk by acting quickly when your personal information has been compromised.

File Early

If you file earlier the less likely you are to have your information stolen or compromised.

Check your Credit

Another way to protect yourself is to keep up to date with your credit history. If you notice suspicious activity, be sure to file a dispute and follow the instructions for having it removed.

No matter how careful you are, you could become a victim. A restaurant employee could snap a photo of your card with a smartphone. You could hear on the news about a data breach that involves a credit card you have used or a store that you frequent. Having your data compromised does not mean that your identity will be stolen, but it is a reason to be extra vigilant.

The sooner you detect a problem, the sooner you can fix it. Regularly checking your credit also avoids the possibility of discovering you have a problem at exactly the moment you had planned to use it. Protect yourself and your income from theft by following these tips.