It is almost time! 7 days from now the IRS will open their E-file system for 2021 tax returns. In all of the chaos of the past two years, I thought it would be helpful to share some insights, small as they may be, into the world of tax filing during a pandemic and beyond. Today continues my 10 Day Countdown, check back each day for more tips and tricks.
Day 4: Identity Protection
Just yesterday I got my monthly email from Google showing me everywhere I went last month. Considering I am either at home or at the office, I see the information as irrelevant. I know I should turn off the location history, but by the time I think about it again, I am neck deep in something else. While my location information may be trivial because I truly go nowhere exciting, there are items I do not share or keep out in the open. I have had my debit card compromised but have never experienced identity theft.
Most people think of their bank accounts, credit cards, and credit score when it comes to identity theft. In the past few years, the number of stolen identities used to file tax returns has increased dramatically.
The IRS has an entire service center dedicated to verifying identities and issuing Identity Protection Personal Identification Numbers, IP PINs. In the past, IP PINs were only for those taxpayers directly affected by identity theft. Just this past year, the IRS has opened the program to any taxpayer who would like to receive one.
This is both good and bad.
It is a great way to protect your data and tax return from any funny business. The drawback is once you have one, you will always have to include the number on your tax return to file. The number changes every year and is not typically assigned until January. If you lost your letter in the past, you were out of luck until you could reach the IRS and request another copy.
For more details on how to get an IP PIN, head on over to irs.gov and check it out.
In the past year or so, the IRS has created an online portal and telephone system to allow you to retrieve your IP PIN. Their website has information regarding these options, I highly recommend taking a look. These options have made filing returns requiring identity protection much easier, especially when the letter with the number on it was put into the “safe place.”
My advice? See if you qualify for an IP PIN on the IRS website and get one during the summer or fall for the following tax season. It is a good way to protect your tax data.
Check back tomorrow to see if you should change your W-4 withholding.