Steps Victims Can Take to Minimize Effect of Data Theft

Every day, the theft of personal and financial information puts people at risk of identity theft. Generally, thieves try to 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 victims’ names.

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

● Try to determine what information the thieves compromised. Compromised information may include emails and passwords, or more sensitive data, such as name and Social Security number.

● Take advantage of credit monitoring services when offered by the affected organization.

● Place a freeze on credit accounts to prevent access to credit records. It varies by state, but there may be a fee to place a freeze on an account. 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, especially those of financial sites and email and social media accounts. Use different passwords for each account. Some experts recommend at least 10-digit passwords, mixing letters, numbers and special characters. Victims may also wish to consider using a password manager or app.

● Use multi-factor authentication, when available. Some financial institutions, email providers and social media sites allow users to set their accounts for multi-factor authentication, which requires a security code, usually sent as a text to their mobile phone, in addition to a username and password.

STANDARD DEDUCTION OR ITEMIZED DEDUCTIONS?

When filing taxes, you can either choose the standard deduction or itemized deductions. The standard deduction is a fixed dollar amount based on your filing status and age that the IRS lets you deduct from your taxable income. Itemized deductions allow you to list (i.e. itemize) your deductions.

It’s a good idea to figure your tax using both methods and choose the method with the most benefit. If you have numerous itemized deductions such as mortgage interest, real estate taxes, gifts to charities, unreimbursed medical expenses, etc., it may be beneficial to itemize your deductions instead of using the standard deduction.

For taxpayers who don’t itemize, the standard deduction for 2017 depends on their filing status:

● Single — $6,350

● Married Filing Jointly — $12,700

● Head of Household — $9,350

● Married Filing Separately — $6,350

● Qualifying Widow(er) — $12,700

If a taxpayer is 65 or older or blind, the standard deduction is more, but that may be limited if another person claims that taxpayer as a dependent.

Note that there are some situations where the law doesn’t allow people to use the standard deduction. For example, if married taxpayers file separate returns and one spouse itemizes, the other spouse must itemize and may not use the standard deduction.

SHOULD YOU FILE A TAX RETURN WHEN IT'S NOT REQUIRED?

Taxpayers are required to file a tax return if their gross income exceeds certain thresholds (which vary based on the taxpayer's filing status). However, even if the taxpayer's income is below such thresholds, the taxpayer still may want to file a tax return. Reasons the taxpayers should file a return include:

● Expected refund: If you had federal income tax withheld from your income during the year, you could be due a refund. The only way to get a tax refund is to file a tax return.

● Refundable credits: A refundable credit is a tax credit that you can get as a refund, even if you owe no tax. You should file a tax return if you qualify to claim one of the refundable credits, such as the Earned Income Tax Credit, Additional Child Tax Credit, or American Opportunity Credit.