Avoid Tax Scams with These Preventive Measures

Tax scams and tax fraud are huge drains on the US economy. They happen every year, and every year there are more and more scams that bilk people out of their hard earned money. Fortunately, there are methods that you can employ to help prevent tax fraud and prevent yourself from becoming a victim of tax scams. Awareness of the problem is the first step, here is more that you can do.

Protect Your Identity

This may seem like a no-brainer, but many people are casual with their identity. Whenever you get a credit card application in the mail, and let’s face it, we get these at least once per week; do you throw it away, or shred it? If you just toss it in the trash, you are subjecting yourself to fraud. Someone can dig through your trash easily, and steal your ID.

Most online transactions are secure, but there are still some nefarious sites out there. Even if you don’t enter your information, malware can start tracking your movements. The next time you key in your social security number it can be stolen.

Be careful with your ID, and run a malware blocker at least once per week. I prefer Malwarebytes because it’s free and easy to use.

Pull a Credit Report

If you have never pulled your credit report, do it now. Actually, run a malware screen first, and then do it. Head over to annualcreditreport.com (the only government approved credit report site), and pull one of the three reports. You can pull a report from each of the agencies once per year without damage to your credit score and without charge. So pull one every 4 months and you can stay up-to-date on what’s going on. Any suspicious activity requires further investigation.

File Your Taxes Early

The earlier you can file your taxes, the less likely someone will use your Social Security Number to file and steal your return. It’s sneaky, and hard to get away with unless you know what you’re doing, but people do it.

First they get all of your info. Name, address, SSN, etc. Then they simply fill out a bogus tax return. They make up any information they need to and steal your thousands of dollars. Since many software programs allow for direct deposit or for money to be loaded onto a prepaid Visa, these scam artists get your money, load it to a card, and move on before you file your taxes.

What happens to you is that when you go to file, you get a letter from the IRS stating that you have already done your taxes. Chances are that the return was done so poorly that you end up being audited for “your” bogus tax return. By the time you know what’s going on, the scammer has had your money for months and is long gone.

Don’t Be a Victim

There are many different methods that you can take to prevent fraud. The first is to be very careful with your personal information. Only give it out when absolutely necessary. You can also sign up for Legal Shield, where for just a few bucks per month you can get identity theft protection.

If you need your taxes done sooner rather than later, hire an accountant in Billings, Montana. With quick turnaround, we can get your taxes done accurately, help you get the largest refund possible, and make sure that you avoid being scammed by eliminating your SSN from the list of those who haven’t filed yet.

Practical Taxes is a full service accounting firm in Billings, Montana. We can do basic tax preparation, but also specialize in online payroll services, business consulting, and a lot more.