Identity theft is a real problem, and it can happen to anyone. Identity theft cases often spike, or are first discovered, during tax season.
If you found suspicious activity while filing, or are hoping to protect yourself from other forms of identity theft, there are some important ways to fortify yourself against attack.
Warning signs of tax identity theft
Now that the tax deadline has passed, it’s important to act fast if you noticed anything questionable while filing. Tax identity theft happens when your social security number is stolen, and someone files taxes in your name to steal your refund.
A few of the main signs of tax identity theft include:
- Multiple tax returns filed using your Social Security number
- Owing tax money for a return you didn’t file
- IRS reporting that you received income from an unknown employer
While those are some of the most common red flags, anything suspicious should be reported and looked into further.
What to do if you suspect tax identity theft
If anything seemed suspicious when you filed your taxes, act fast to get to the bottom of anything criminal.
According to the IRS, your next moves should be:
- Responding to the IRS immediately if you receive a notice
- Complete IRS Form 14039 (Identity Theft Affidavit) if your return is rejected because of a duplicate filing
- Get a copy of your return if you believe someone has filed a fraudulent return in your name
You can also IdentityTheft.gov to report any suspicious activity.
Protect yourself from unemployment fraud
During the pandemic, unemployment claims skyrocketed. Many of those were legitimate, as people found themselves suddenly out of work. But fraudsters also saw that as an opportunity to steal unemployment support.
Some of the most common unemployment fraud red flags include:
- Receiving unemployment benefits paperwork in the mail when you didn’t sign up for it
- Getting a call from your employer about unemployment benefits
- Filing, and being rejected for, a legitimate benefits claim
- Suspicious activity in your bank accounts. Criminals may have tried to steal unemployment benefits in your name, but the funds went to your account.
If you suspect unemployment fraud, make sure you report it to your state’s Department of Labor fraud unit and notify your employer and state unemployment agency of the suspicious activity.
General identity theft prevention
In this digital era, it’s a smart idea to be continuously on the lookout for any suspicious activity in your accounts. Make it a habit to be consistently watching your bank and credit card accounts, because that’s one of the first places people notice fraudulent transactions.
You should also check your credit report annually, and look for any issues every year when you file taxes.
Don’t forget to create super-secure passwords, especially for your banking and credit card accounts, and change them frequently. To protect yourself further, you can activate two-factor authentication on your most important accounts.
Last, keep up on the news for the latest scams going around. People are becoming more educated about signs of a scam phone call or email, but scammers are also becoming more sophisticated.
About Your Richest Life
At Your Richest Life, Katie Brewer, CFP®, believes everyone should have access to financial resources and coaching. For more information on the services offered, contact Katie today.