Tax season is in full swing. Like every tax season, scammers are on the hunt for unwitting victims. File too late and, whoops, someone already did in your name.
This year is set to be even more dangerous, with brand-new schemes already taking people for a ride. We have some warnings you can’t miss below on the biggest scams the IRS has spotted and what you can do about them.
The real key here is don’t wait! Skip the potentially sleazy tax preparers who just want your money and do the job yourself. We ranked the top software no matter your situation.
The biggest tax scams this year
We’re seeing the return of those “old faithful” scams, like IRS impersonators and W-2 scams. Some of these are getting scary new twists, though. Here are the most widespread scams you have to watch out for.
- Impersonators: It’s not just phone calls and clearly fake emails anymore. IRS impersonators are going door-to-door, threatening to put people in jail — unless they pay money, NBC 10 Boston reports.
- W-2 scam: This has been going on for a few years. Basically, in this phishing scam, a criminal impersonates a company or organization’s executive email address. They target a payroll, financial or HR employee with a request to transfer money. The FBI said these scams had stolen over $3 billion in wire transfers since January 2015.
- Ghost tax preparers: These unscrupulous tax return preparers refuse to sign returns. By law, anyone who is paid to help you file tax returns is required to sign and include their preparer ID number. If you e-file a return without the preparer’s information, you’re in big trouble.
- Identity theft: Scammers who have your Social Security number from a previous breach or data leak may file your taxes before you do. Tap or click here to see if you’re at risk.
Now that you know what types of tricks may come your way, let’s look at the precautions you can take. Take these steps to keep your money safe.
There’s nothing a scammer loves more than money — but disinformation is a close second. The less you know, the easier you are to trick. They love to spread lies about tax season, so drill these truths into your head to recognize tax scams.
- The IRS really only reaches out to people via snail mail. Be wary of any other attempts at communication because, in all likelihood, those are a scam. Don’t click on email links or attachments that claim to be from the IRS. The same goes for texts and social media messages.
- If you get a call from someone claiming to be an IRS agent who tries to threaten you, hang up and report it here. Even though they try to scare you into paying, just remember that the IRS will never demand gift cards to keep you from going to jail.
- Only hire a reputable tax preparer. Doing an internet search isn’t good enough, sadly. Online reviews can be faked. Look for a big name you can trust, visit the location in person if it’s safe to where you live and get on the phone with your preparer. Personal recommendations from family and close friends are great, too.
If you want to take your security a step further, get an identity protection PIN. It’s a six-digit number known only to you and the IRS. You use it to verify your identity when you file your tax return, whether it’s on paper or online.
The best software to get the job done
Instead of wondering if the tax preparer you found is really looking out for your best interests, you can get the job done yourself.
Americans spend an estimated 1.7 billion hours doing their taxes each year, according to ProPublica. We also spend about $31 billion each year — just from filing taxes. Today’s software makes it easy and walks you through every step of the way. Here are our picks.
For simple, straight forward filing
You know the name TurboTax for a reason: This software just plain works. TurboTax Basic is best for people with a straightforward tax situation. If you want to claim the Earned Income Tax Credit, or if you only need to file a federal tax return, this is the best option for you. You’ll get guidance and support, along with double checks along the way. There’s no need to know taxes. Just answer simple questions, and TurboTax takes care of the rest.
Use this version if you need to file a state return as well.
More advanced features if your situation is more complicated
Maybe your financial situation isn’t as cut and dry. If you sold stocks, bonds or mutual funds, own a rental property or are a trust beneficiary, TurboTax Premier is what you want to use. It automatically imports W-2s and investment and mortgage information to streamline the process for you. The software also searches more like 350 deductions and credits to help you maximize your return.
The best choice for small business owners
TurboTax Home & Business Desktop is great for small business owners. If you’re self-employed, an independent contractor, a freelancer, a small business owner or a sole proprietor, this is the best tool. It searches for deductions, helps you find write-offs you missed, makes categorizing expenses easy and is perfect for entering multiple sources of income. It includes five free federal e-files and one download of TurboTax’s state e-file, worth $40.
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