When tax season comes around, taxpayers have two options for filing their taxes: paper or electronic filing. While some taxpayers have strong opinions about which one is better for them, an important question to ask is…
Which is more secure?
With the increase in the risk of identity theft and tax fraud, consumers should be careful how they file their taxes and consider the advantages and risks of electronic or paper filing.
Filing Taxes Online
Although more consumers have shifted to filing taxes online, there are questions on whether e-filing offers the most security for tax and personal information.
Last year, news stations such as CBS New York reported that Intuit Inc., the parent company of Turbo Tax, had halted electronic filing for state returns after there were reports of an increase in tax fraud. Subsequently, they were able to resume electronic filing of state returns the next day. While the company’s website itself was not compromised, identity thieves were found to be more likely to file fake tax returns using an electronic filing service. It was believed that personal information had been stolen elsewhere and was used to file returns through their software.
How to make sure your personal information is secure when filing taxes online:
- Avoid internet-based tax scams. You may receive emails from senders claiming they are with the IRS, prompting you to resend personal information.
- Make sure your devices are free of malware; a risk that could allow cybercriminals to access your information remotely, according to the IRS.
- Send your information through a secure internet connection.
Filing on Paper
Some consumers prefer filing their taxes on paper because they are more familiar with this method. However, there are certain risks involved as identity thieves could attempt to steal important paper documents from taxpayers or by dumpster diving for documents that were thrown away.
How to make sure your information is secure when filing taxes on paper:
- Keep any paper documents and copies secure by ensuring you prevent sensitive documents containing personal information, like Social Security numbers and dates of birth, from falling into the hands of would-be identity thieves.
- Shred documents or lock them away in a safe. You may also consider locking your mailboxes to avoid identity thieves from pilfering your mail without your knowledge.
As consumers, you should consider the benefits and disadvantages of filing taxes online or through mail, and with either method, decide how you could improve your personal information’s security to avoid becoming a victim of tax fraud and identity theft.
Want more information on tax fraud? Find out about securing your personal information and identity theft in our Fraud Report.