Landing that first part-time job in high school and filing your first tax return is a rite of passage for a young person. So why am I so anxious about my daughter becoming a taxpayer and sharing her pristine personal data with the U.S. government?
Where do I begin? The fact is, the more widely her personal information travels, the more digital risks she faces. Adding to my angst is my own experience with identity theft over a decade ago that still haunts me and is the last stress I’d wish upon my child or anyone else’s.
So as my daughter waves her W-2 at me and elatedly chatters about how she’s going to spend her refund, I — like so many other parents across the country — put on my coach’s hat for a key talk around the digital risks that come with tax season.
7 Tax Filing Safety Tips for Families
- Allow your child to file. Sometimes it’s easier just to file a 1040-EZ form for your child and be done with it. The wiser route is to take the time to teach your child the few steps needed to file correctly and the legal reasons we all must pay taxes. Part of this discussion is going over the digital risks of tax season such as identity theft, malware and viruses, tax fraud, and identity theft.
- Discuss the power of a SSN. Talk about the responsibility and power of owning a Social Security Number (SSN) and why it must be safeguarded. A SSN is the most critical piece of government-issued identification an American citizen can possess. It is tied to personal credit, identification, and is the primary way the way the government tracks earnings of an individual during his or her lifetime. The SSN is the golden ticket for cyber thieves who make a career of stealing and selling social security numbers and identities online.
- Secure all digital doorways. One of the ways cyber thieves gain access to personal information is through hacking, and the best way to slam that door is by creating strong passwords. Easy passwords are the #1 way hackers unlock our data. Tax time is a perfect opportunity to challenge your child to create stronger passwords for all of his or her devices and email accounts. At the same time you upgrade password security, make sure updates on software, PCs, phones, and web browsers are current to protect your devices against viruses and malware that can grab login information.
- File early. Start the habit of early filing. The sooner you file your tax return and teach your child to do the same, the more you lessen the chance of a thief using yours or your child’s identity to claim a refund before your return goes through. According to the Identity Theft Resource Center, tax return fraud is on the rise due to more significant security breaches and the number of identities now for sale online.
- Be overly cautious every step of the way. Use a reputable firm or company to handle yours and your child’s tax return. Legitimate tax preparers must sign all forms with their IRS preparer identification number. If you end up filing the 1040-EZ form on paper, be sure to hand deliver your returns to the post office mailbox. Thieves target March and April as prime for stealing tax information from curbside, residential mailboxes. Filing online? That’s fine if you make sure you do so over secured wifi. The local coffee shop or library isn’t going to protect your tax information from unscrupulous, prying eyes. Look for the HTTPS web designation at the front of the Internal Revenue System’s web address before submitting your documents.
- File a fraud alert. Because your child has rarely used his or her social security number, set up a fraud alert. By submitting a fraud alert in your child’s name with the three main credit bureaus several times a year, you will be able to catch any credit fraud early. Since your child hasn’t built any credit, anything that comes back will be illegal activity. The fraud alert will remain in place for only 90 days. When the time runs out, you’ll need to reactivate the alert. You can achieve the same thing by filing an earnings report from the Social Security Administration. The report will reveal any earnings acquired under your child’s social security number.
- Celebrate. Tax time tends to bring out the anxiety in just about everyone. Change that mentality with your child if possible. Make tax time rewarding. Go out for a celebration dinner or dessert. Congratulate him or her on filing safely and responsibly. And, don’t forget to recognize the even bigger accomplishment of stepping into the workforce and taking on the challenge of a first job.
This post is the first of a two-part series focused on digital safety during tax season. Next week, we will highlight some of the scams thieves use and how to safeguard your family.