4 ways to prevent tax ID fraud
SUWANEE, Ga. - It's tax time folks. Happens every year at the same time. And every year about this time, thieves try to steal your identity and your money. But this year has an added layer of concern.
Remember that Equifax breach? More than 145 million people are impacted. And now we're hearing hackers got more information than earlier believed. They have social security numbers, birth dates and addresses and some driver's license numbers. But it was just recently discovered that hackers got tax identification numbers, email addresses and phone numbers. Oh, and credit card expiration dates.
So if they have your identity they can file taxes in your name. So here are 4 THINGS YOU CAN DO to protect yourself.
#1 FILE EARLY
It's your best defense against tax ID theft. You want to beat the bad guys to the punch. If you've filed, then they come in after you, the IRS will say, 'Hold on,' and stop it right there.
#2 RED FLAGS
Make sure your 1099s and W2s are accurate. Financial planner Mark Lloyd of the Lloyd Group explains why.
"If you see a 1099 or a W2 or any tax form that looks rogue to you or that you've never seen before, immediately call the IRS and let them know that you may have already been a victim of identity theft."
#3 BE SECURE
Don't do your taxes on a public Wi-Fi system. That's the equivalent of putting your personal tax information out on a table at the coffee shop for all to see. Use a password-protected system.
#4 ADJUST YOUR WITHHOLDING
The average refund is $2,800, but conventional wisdom is that you should get back as little money as possible. Get it as close to zero as you can. Here's the problem: If you are counting on that refund and you're an ID theft victim, it could take months for the IRS to sort things out and get you the money you're owed.
"That's all now in a mess because the IRS has two tax returns and you've been waiting on that money, Wow that could hurt you especially if you wre using that to pay bills that you knew were coming due," Mr. Lloyd says.
Here are some helpful links for reviewing your withholding status.
Please watch the full story to understand why a credit freeze will not prevent you from tax ID fraud.