Tax Implications of Equifax Data Breach

23 Oct Tax Implications of Equifax Data Breach

Tax Implications of Equifax Data Breach

Serious tax implications and how to avert the risk

Equifax is a well-known credit reporting agency that manages the data of millions of individuals in the US and across the world. In a recent report, Equifax disclosed the data breach that jeopardized the sensitive information of millions of Americans.

What exactly is Equifax Data Breach?

• Equifax data breach happened where the hackers accessed the sensitive information of people such as their names, Social Security numbers, driving licenses, birth dates, addresses etc
• The hackers also stole the credit card numbers for lots of people
• From May through July this year, Equifax reported unauthorized access to approximately 143 million American’s sensitive information and personal data
• Check if your information has been compromised here: Equifax Security 2017

Tax implications of Equifax Data Breach

Equifax data hack poses serious implications for a large number of the tax-paying population where the criminals could potentially access the stolen Social Security numbers in order to file fraudulent tax returns and profit from refunds in an illegal manner.

This creates a serious threat to the victimized taxpayer, who must take immediate steps to resolve the data theft with the IRS or hire a trusted accountant to help resolve the issue. Furthermore, since this is going to be an ongoing problem, it is essential to plan the taxes in a systematic and timely manner.

How to avert the risk of Equifax data breach

Below are some of the steps that can avert the risk of Equifax data breach-:

• Keep a regular tab on your credit reports

First and foremost is to keep a regular tab on your credit reports. The same can be accessed for free on the Equifax website. As soon as you notice any discrepancy or unknown account activity, report the same immediately as it might be the case of identity theft.

• Check your credit card and bank account details regularly

At times, we forget to check the credit card and bank account details closely due to which the unknown transactions or unauthorized entries go unnoticed. Make sure to check your credit card and bank account details on a regular basis so that any account breach can be identified immediately.

• Explore the options such as credit freeze/fraud alert on your tax files

To keep your personal identification and important details safe and secure, explore the option of putting a credit freeze on your files. A credit freeze makes it difficult for others to access our information. Additionally, opting for a fraud alert option allows you to get the warnings in case of potential unauthorized access and seeking the verification from you to confirm the identity.

• Ensure to file your taxes timely

It is essential to be on top of your tax filing schedule to prevent hackers and scammers get hold of your tax details. Generally, the tax identity theft happens when hackers access your personal information such as Social Security number, credit card details etc to get a tax refund or for other personal gains. Maintaining a healthy tax-paying history allows you keep track of your returns, responding letters from the IRS etc thus minimizing the chances of tax theft.