Tax time is among the most stressful times of the year that is true. However, filing your income tax return is apparently not the only thing that you should be worried about. Last year alone, 1.1 million fraudulent tax returns were filed by identity thieves. That is a whopping 21x more than the 51,700 fraudulent returns filed five years ago in 2008.
This is most certainly something alarming, as obviously, it means that tax-related identity theft is on the rise. The worst thing is, it can happen to just about anyone – even your infant child.
Identity theft essentially is the crime that occurs when another person “steals” your personal information – social security number, driver’s license information, credit card numbers and etcetera – for their own fraudulent, financial gains.
A lot of measures are already in existence to combat and thwart these identity thieves, and to promote tax refund ID theft prevention. However, persistence does beget persistence. The more unified systems are put up in place to protect against these offenders, the more they try to find some more loopholes that they can exploit so they can commence with their malicious plans.
Still, one should always stay vigilant, especially when it comes to their financial identity. After all, the repercussions are plenty and severe should one’s personal information fall into the wrong hands.
When it comes to the matter of tax identity fraud, rest assured that there are also simple methods that you can implement on your own to guard yourself against it. When it comes to identity theft protection, you should not cut corners. Be willing to do what is necessary, because in the end, it will be for your own good. If you think dealing with credit card companies is bad just wait until you try to deal with the IRS that’s another nightmare.
Here are three of the most basic practices to follow to avoid falling victim to tax identity fraud:
1. Trust no one with your Social Security Number
Well, mostly no one, that is. It is important for you to realize just how integral that number is to your entire individuality and well-being. Your Social Security (SS) number is used as an identifier and thus it contains information needed to be able to take out a housing loan, a car loan, welfare, tax returns, and more.
Essentially, your entire civic identity rests on that one magical number held on your card. For you to give away the information from it – willingly or not – is tantamount to giving your identity away. That said, you would definitely want to make sure that whoever has access to your SS number is definitely authorized and trustworthy.
It has been reported that there has been a growing number of incidences where identity thieves pose as IRS telemarketers, asking to confirm such and such detail of the account owner. For one thing, if anyone “from the IRS” calls you regarding the confirmation of your accounts, or something to that effect, you can already be sure that it is a fraud waiting to happen. IRS folks do not call people up – they send them snail mail. That alone should already be a red flag for you.
2. Dispose of your records properly
Sure, you’d want to de-clutter your bag. You want to get rid of all these little pieces of paper that clog up your pockets and your wallet. If you want to dispose of receipts, don’t just throw them randomly. They may be trash to you, but for desperate dumpster divers, they may be as good as gold—the kind of gold that comes at your expense.
In case it has slipped your mind, be reminded that these receipts are invoices that serve as proof of your transactions. So, if you use your credit card to pay for that half a pound of steak for dinner, then you can be sure that your credit card number will be reflected on the receipt.
At the same time, you also wouldn’t want to just carelessly throw out your old credit cards. Never mind if you’ve already blocked or deactivated the account. Hackers have a way around everything. For as long as they have the digits, they can make decent cash out of it. Shred them or burn them you will be much safer doing it that way. Again, the unfortunate thing is that it’s going to be at your expense if you don’t do it properly.
3. Regularly monitor your credit
It can be a tedious task, yes. However, it’s all a matter of putting things into perspective. Would you rather spend a day out of your weekend every month just going over your accounts, or would you rather be complacent but end up dealing with fraudulent transactions charged to one or more of these accounts and thereby resulting in your inability to take out a proper loan or commit to a decent transaction? The answer to that is rather simple and clear.
How credit monitoring helps is not rocket science, either. By being regularly aware of the activities you make financially, you more or less have an idea of how your credit report should look when you see it. At the first instance of unfamiliarity, you should be able to put your finger on what is wrong with it, and thereby react with the correct and necessary actions.
Again, these are simple steps you could do for your own protection. Now that you have the information, it is up to you to use it to your advantage. If you have any more tips to share with the rest of our readers, do feel free to add your input via the comments section below.
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