Tax identity theft, in which a thief uses your personal information to file a fraudulent tax return to collect a refund, is on the rise. Unfortunately, most people aren't aware there’s a problem with their identity until they receive notice from the IRS, or their CPA is unable to file their taxes because their Social Security number has already been used. You can prevent this costly headache by following a few tips to protect your personal information. 

How to Protect Yourself from Tax Identity Theft

1. Know the Signs

As mentioned, not being able to file your taxes is a red flag that your identity has been compromised. Other signs to watch for include receiving updates about your online account that you didn’t request, receiving IRS notices about income earned at jobs you never held, and getting tax bills for years when you didn't file. 

2. Protect Your Online Life

Tax identity theft is just one of the many ways that compromised personal information can wreak havoc on your life. Keeping your online life secure and out of the wrong hands means using strong passwords, installing antivirus protection, and only using secure networks when sharing sensitive information. Learn the signs of phishing, and never respond to emails, texts, or phone calls claiming to be from the IRS. The agency will never request information using those methods, so delete and ignore those messages. 

3. File Your Taxes Early

Financial experts and CPAs recommend filing your taxes as soon as possible. Not only does filing sooner get you a refund faster, but it also limits the window of opportunity for thieves to file a fraudulent return. If you are concerned about owing taxes, you can file early and pay the bill later, as long as it’s before April 15. 

4. Monitor Your Accounts

Actively monitoring your accounts for identity theft may not stop thieves, but it allows you to take quick action. Consider enrolling in a credit monitoring service for alerts to changes on your credit and put a security freeze on your Social Security number. All three credit bureaus allow you to freeze your credit for free, prohibiting anyone from viewing your credit report without your consent, which prevents thieves from opening new accounts.

5. Choose a Reputable Tax Preparer

Although most CPAs and tax preparers are ethical and provide exceptional services to their clients, some individuals pose as tax preparers for the specific purpose of stealing personal information. Choose a tax professional who is certified and has experience and a reputation for honesty.

If you suspect you’re a victim of tax identity theft, contact the IRS for help. To ensure your taxes are filed correctly, turn to Wilson, Rea, Beckel & Associates, CPAs, LLC. This Pagosa Springs, CO, accounting firm offers expert tax services and planning for individuals and businesses, as well as an array of additional financial services. To learn more, visit them online, or call (970) 731-1040 to speak with a CPA.