Criminals can do a lot of damage with your personal information, including taking out credit cards and loans in your name, opening bank accounts, or even making a counterfeit debit card. But tax identity theft can be even worse, causing long-term problems with the IRS and the loss of your tax refund. Understanding the threat can help you prevent this serious problem before it gets out of control.

A Guide to Tax Identity Theft

What Is Tax Identity Theft?

If a criminal gets their hands on your Social Security Number, they can actually file a false tax return to claim your refund. Many will use fake information to get the largest refund possible: money the IRS might expect you to pay back after the fraud is discovered. Some might also use your identifying information to get a job under your name, leaving you responsible for taxes on income you never earned.

Common Signs Your Tax Identity Has Been Stolen

Detecting identity fraud can be extremely difficult because many victims don’t realize anything is wrong until after the fact. If the IRS claims you owe taxes for a year you didn’t file or demands income tax for a job you never had, your tax identity may have been stolen. Many victims discover that their refunds have been stolen when they try to file their taxes, only to find that the IRS has already processed a return with their name.

How to Protect Yourself

The best way to keep identity thieves from stealing your tax refund is to file your return as soon as possible. If they try, the IRS will reject the duplicate return while you keep your refund. Protecting yourself from fraudulent use of your Social Security Number is more difficult, but you can start by never clicking links from email addresses you don’t recognize or carrying your SS card with you.

If you’re ready to file your taxes, let the professionals at Simplified Tax eliminate the stress and confusion. They’ve been serving the Sparta, WI, area for over 40 years, helping ensure their clients get every deduction available and avoiding problems before they happen. Visit their website for more on their tax planning and preparation services or call (608) 269-2633 to make an appointment today.