File Your Tax Return Early To Avoid Identity Theft
Filing your taxes can be frustrating, but dealing with tax fraud and identity theft can be even worse. As we prepare to file our returns by the April deadline, we often forget that tax season is also a great opportunity for identity thieves.
Many of last year’s large-scale data breaches have already given identity thieves an advantage in the tax fraud and identity theft game. These breach events exposed a multitude of personal and financial information that will be used to fraudulently file tax returns this year.
Tax refund fraud affects hundreds of thousands, if not millions, of U.S. citizens annually. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually due a refund from the IRS.
If the IRS believes you were likely the victim of tax refund fraud in the previous tax year they will likely send you a special filing PIN that needs to be entered along with this year’s return before the filing will be accepted by the IRS electronically.
Minimize the chances of getting hit by tax refund fraud this year by filing your taxes before scammer can!
This has the due dates for January 2018 that most taxpayers will need.
Employees who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070.
Individuals. Make a payment of your estimated tax for 2017 if you didn’t pay your income tax for the year through withholding. Use Form 1040-ES. This is the final installment date for 2017 estimated tax payments. However, you don’t have to make this payment if you file your 2017 return (Form 1040) and pay any tax due by January 31, 2018.
Farmers and fishermen. Pay your estimated tax for 2017 using Form 1040-ES. You have until April 17 to file your 2017 income tax return (Form 1040). If you don’t pay your estimated tax by January 16, you must file your 2017 return and pay any tax due by March 1, 2018, to avoid an estimated tax penalty.
Individuals who must make estimated tax payments. If you didn’t pay your last installment of estimated tax by January 16, you may choose (but aren’t required) to file your income tax return (Form 1040) for 2017 by January 31. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of the last installment. If you can’t file and pay your tax by January 31, file and pay your tax by April 17.
Give annual information statements to recipients of certain payments you made during 2017. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient. Payments that may be covered include the following.
Cash payments for fish purchased from anyone engaged in the trade or business of catching fish.
Compensation for workers who aren’t considered employees.
Dividends and other corporate distributions.
Royalties. Payments of Indian gaming profits to tribal members.
Retirement plan distributions.
Original issue discount.
Prizes and awards.
Medical and health care payments. Debt cancellation (treated as payment to debtor).
Cash payments over $10,000. See the Form 8300 instructions.
See the General Instructions (Pub 509) for Certain Information Returns for information on what payments are covered, how much the payment must be before a statement is required, which form to use, when to file, and extensions of time to provide statements to the IRS. Forms 1099-B, 1099-S, & certain reporting on Form 1099-MISC, Misc. Income, are due to recipients by February 15.
Payers of nonemployee compensation. File Form 1099-MISC for nonemployee compensation paid in 2017.
There are a few simple things you can do to protect your identity and personal
information online. Following these steps can also help you protect your tax return and
refund in 2018:
• Shop at familiar online retailers. Generally, sites with an “s” in “https” at the start
of the URL are secure. You can also look for the “lock” icon in your browser’s
URL bar. That said, some criminals may get a security certificate, so the “s” may
not always mean a site is legitimate.
• Avoid unprotected Wi-Fi. Users should not do online financial transactions when
using unprotected public Wi-Fi. Unprotected public Wi-Fi hotspots may allow
thieves to view transactions.
• Learn to recognize and avoid phishing emails that pose as a trusted source.
These emails can come from a source that looks like a legitimate bank or even
the IRS. These emails may include a link that will take you to a fake website.
From there, the thieves can steal your username and password.
• Keep a clean machine. This includes computers, phones and tablets. You should
install security software to protect against malware that may steal data. This
software also protects against viruses that may damage files.
• Use passwords that are strong, long and unique. Experts suggest a minimum of
10 characters. Use a combination of letters, numbers and special characters.
Use a different password for each account.
• Use multi-factor authentication when available. Some financial institutions, email
providers and social media sites allow you to set your account for multi-factor
authentication. This means you may need a security code, usually sent as a text
to your mobile phone, in addition to a username and password.
• Sign up for account alerts. Some financial institutions send email or text alerts to
an account holder when there is a withdrawal or change to their accounts.
Generally, you can check your account profile to see what added protections
may be available.
• Encrypt sensitive data and protect it with a password. This includes financial
records, tax returns or any personal information on your computer. You should
also back up important data to an external source. When disposing of a
computer, mobile phone or tablet, make sure you wipe the hard drive of all
information before trashing.
For more information, visit Taxes.Security.Together on IRS.gov.