Tax Tip Tuesday: Tax Records & Identity Theft

January 26, 2016

 

As tax season begins and you gather your records and receive your return, it is crucial that you store these documents securely. Identity theft is a major problem. But there are simple ways you can keep your information safe.

 

Because of the sensitive data, the loss or theft of these documents could lead to identity theft. These documents contain the Social Security numbers of you, your spouse and dependents, old W-2 income, and bank account information. A burglar could easily turn your old documents into a tax-related identity theft crime.


Here's what you need to do with your records whether they are stored on paper or electronically. The same rules apply for any financial or health records you store, especially any document including Social Security numbers.


If you keep paper records, you should keep them in a secure location, preferably under lock and key, such as a secure desk drawer or a safe.


Dispose of old tax records properly. Never toss paper tax returns and supporting documents into the trash. Your federal and state tax records, as well as any financial or health records should be shredded before disposal.


If you are disposing of an old computer or back-up hard drive, keep in mind there is sensitive data on these. Deleting stored tax files will not remove them from your computer. You should wipe the drives of any electronic product you trash or sell, including tablets and mobile phones, to ensure you remove all personal data. Again, this may require special disk utility software.

 

Taking the time to store your records securely can make a world of difference and prevent you from becoming a victim of identity theft.

 

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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