COLUMBUS, OH (WBNS) — Tax season begins today and thieves are looking at ways to scam you out of your money. Local financial professional, Shane Eighme from Shane and Shane Financial has some helpful tips for those filing taxes.
WHY SHOULD TAX FILERS BE ESPECIALLY ON THE LOOKOUT THIS YEAR?
Remember the big Equifax data breach last fall? Hackers stole the personal information of up to 143 million people, and that includes Social Security numbers.
Scammers could use those Social Security numbers to file fraudulent tax returns to steal people’s refunds.
Unfortunately, the steps many victims took after the hack, like credit freezes and credit monitoring, do not protect you against Tax ID Theft.
WHAT CAN WE DO TO PROTECT OURSELVES?
1. File Early
Filing early is the best defense against Tax ID Theft. If the IRS already has your legitimate tax return on file, scammers will have a much harder time.
You may not have all of your paperwork at the start of the season; I’m not suggesting you rush to file with incomplete information.
Take the steps you can now so you’re ready when that paperwork arrives, by gathering documents and receipts and getting organized.
2. Watch for Red Flags
The IRS is warning there could be signs that your Social Security number or other personal information has been compromised.
Red flags include forms from the IRS that include wages you didn’t earn or a W-2 form or 1099 from an employer you don’t work for.
If you get one of these forms, do not include it in your tax return.
If the form came from the IRS, contact them. I have a link to do that on my website, shaneandshanefinancial.com.
You can also contact the Social Security Administration to review your wages.
3. Be Secure
If you’re e-filing your taxes, make sure you have a security software with firewall and anti-virus protections.
Do not use public wi-fi; instead use a private, password-protected connection.
Treat your tax documents and any documents with your personal information like cash, and don’t leave them lying around in the open.
4. Adjust Your Withholding
If you’re the victim of Tax ID theft, it can take months to get your refund.
The average refund in 2017 was about $2,800.
The bigger the refund you’re waiting for, the more frustrating the wait will be!
By adjusting your withholding, you can reduce the size of your refund and get more money in your paycheck year-round.
I recommend my clients adjust their withholding so their refund is as close to 0 as possible.
That way, you can make good use of your money throughout the year by saving or investing it, instead of letting Uncle Sam hold onto your money interest-free.
The first step is to contact the IRS as soon as possible. Document everything, and keep in contact with the IRS until the issue is resolved.
You can file an identity theft complaint with the Federal Trade Commission (FTC).
You may also want to file a report with the local police, as well as contact the fraud departments of the three major credit bureaus. Those resources are also listed on my website.