Small Business Taxes & ManagementTM
Having worked in a tax office for years we've seen firsthand how concerned our customers are with the possibility of their identity getting stolen. It seems that everyone these days has a horror story related to the theft or misuse of their identity. Many times the mere thought of such a thing happening can make people paranoid about sharing their personal information. When filing taxes, there is certain information that is a required part of the process, whether you prepare them at an office with a tax professional or using tax software in front of your computer at home.
There is no need to be terrified about protecting your identity as long as you take some basic precautions. To begin with, do not, as a rule, carry your social security card or bank account information with you unless you are going to be using that information in the very near future. Also, never, ever release any of this valuable personal or financial information to anyone who you do not know or haven't vetted beforehand.
It would be a good idea to avoid any situation where you receive a random email and respond by giving the sender financial or personal identity information. Neither your bank nor the IRS will ever ask you to email them this kind of info. There should also be a legitimate purpose for anyone to ask you for it. Even a close relative should have a plausible explanation as to why they require it. Being cautious in this way can be invaluable in terms of preventing the headaches that can come with having identity information misused.
At most tax and accounting offices, there are professional systems in place to ensure the security of personal and financial information. Locked boxes and contract shredding services are utilized so that no one can ever get access to identity info even if they go through the trash. Also, social security numbers are entered a few different times for a tax return, but once they are, the numbers are concealed in almost every place they could possibly be viewed, especially when the return is being printed. Printed returns do not list the whole Social Security number if they are done in a professional tax office. E-filing has also allowed for greater security, so that ID numbers are encrypted while being transmitted to the IRS for processing. The files being stored on computers for future reference are also encrypted as well as password protected.
Fortunately, there are resources that you can use if you are afraid of your identity getting stolen. One such resource is the Identity Theft Resource Center. This is a great resource for both preventing identity theft and for recovering from it, if your ID does get stolen. There are several professional-grade services that can help you monitor your credit records to keep criminals from opening unauthorized credit lines or otherwise using your identity to illegally benefit themselves. Products such as LifeLock vary in complexity and features, depending on which tier of service you choose. The main service provided to the consumer here is creating peace of mind, which is invaluable based on how often identity theft occurs these days.
The bottom line is, taking a few basic precautions can keep you from worrying needlessly about ID theft during tax season. This will let you focus on getting your return filed on time and getting back all the money you have coming to you.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject.--ISSN 1089-1536
--Last Update 04/10/12