Taxpayers can minimize the effects of data theft with these steps

Every day, the theft of personal and financial information puts people at risk of additional problems. Thieves often use the stolen data as quickly as possible to:

  • Sell the information to other criminals.
  • Withdraw money from a bank account.
  • Make credit card purchases.
  • File a fraudulent tax return for a refund using a victim’s name.

Victims of a data loss should follow these steps to minimize the effect of the theft:

  • Determine what information the thieves compromised. This may include emails and passwords or more sensitive data, such as name and Social Security number.
  • Take advantage of credit monitoring services. When an organization or company is affected by a data theft, they will often offer these services.
  • Place a freeze on credit accounts. This will prevent the thieves getting access to a victim’s credit records. There may be a fee to place a freeze on an account, and it varies by state. At a minimum, victims should place a fraud alert on their credit accounts by contacting one of the three major credit bureaus. A fraud alert isn’t as secure as a freeze, but it’s free.
  • Reset passwords on online accounts. This includes financial sites, email accounts and social media accounts. People should use different passwords for each account. If possible, users should create passwords that are at least 10-digit passwords. People should mix letters, numbers and special characters when possible. Victims should consider using a password manager or app.
  • Use multi-factor authentication if available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication. This requires a security code, usually sent as a text to their mobile phone, in addition to a username and password.

Five facts about the new Form 1040

There are several changes to the 2018 Form 1040. However, taxpayers who file electronically may not notice the changes as the tax return preparation software guides people through the filing process.

The IRS worked closely with its partners in the tax return preparation and tax software industries to prepare for tax reform and tax form changes affecting the tax year 2018, including the Form 1040. This ongoing collaboration ensures that taxpayers can continue to rely on the IRS, tax professionals, and tax software programs when it’s time to file their tax returns.

Here are five things taxpayers need to know about the 2018 Form 1040.

  • The 2018 Form 1040 replaces Forms 1040,1040A and 1040EZ with one 2018 Form 1040 that all taxpayers will file.
  • Forms 1040A and 1040EZ are no longer available. Taxpayers who used one of these forms in the past will now file Form 1040.
  • The 2018 Form 1040 uses a “building block” approach and allows taxpayers to add only the schedules they need to their 2018 tax return.
  • The most commonly used lines on the prior year form are still on the form. Other lines are moved to new schedules and are organized by category. These categories include income, adjustments to income, nonrefundable credits, taxes, payments, and refundable credits.
  • Many taxpayers will only need to file Form 1040 and no schedules. Those with more complicated tax returns will need to complete one or more of the 2018 Form 1040 Schedules along with their Form 1040. These taxpayers include people claiming certain deductions or credits, or owing additional taxes.

Electronic filers may not notice any changes because the tax return preparation software will automatically use their answers to the tax questions to complete the Form 1040 and any needed schedules.

For taxpayers who filed paper returns in the past and are concerned about these changes, this year may be the year to consider the benefits of filing electronically. Using tax software is convenient, safe and a secure way to prepare and e-file an accurate tax return.