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Free credit freezes help with ID theft, but tax fraud prevention requires more

September 22, 2018

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Is there anyone anywhere who hasn't been a potential identity theft victim? Probably not.

Even if the crooks haven't stolen your identity — yet — there's still the possibility if some holder of any of your personal information has been hacked. And that happens every day.

The biggies get the most attention, like last year when cyber criminals got hold of Equifax credit bureau data, putting almost 146 million identities at risk.

And no one is safe. Just last week, the federal government again fell victim to hackers. The State Department, like the Office of Personnel Management and Internal Revenue Service before it, suffered a breach of one of its e-mail systems, exposing some of its employees' personal information.

So, no. Everybody will probably have to deal with identity theft at some point.

Cooling cyber theft attempts: One way to protect yourself when your personal info is compromised is to put a credit freeze on your credit bureau data.

And as of Sept. 21, you can do that for free.

A credit freeze restricts access to your credit file, preventing anyone from opening any new credit in your name.

Credit bureau phone contactsLenders typically won't issue loans or open credit accounts unless they can examine your credit report maintained by Equifax, Experian and TransUnion credit bureaus. That's impossible when you've frozen it.

It previously cost around $10 to freeze your credit. And if you decided to apply for a new loan yourself, you usually had to pay another sawbuck to unfreeze your data to let the lenders look.

But thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act, there's no cost for freezing and unfreezing your credit.

Today's Saturday Shout Out goes to the Federal Trade Commission, which details how to freeze your credit.

The FTC article also discusses the other components of the new law, like establishing a free freeze for youngsters age 16 or younger, military personnel credit freeze considerations and fraud alerts.

You also can find out what to do if you think a credit reporting agency is not placing a credit freeze or fraud alert properly.

Tax fraud protection steps: While a credit freeze is a wise step when your personal and financial data has been compromised, credit experts note that freezes will not protect against some other forms of identity theft, such as a fraudulent tax return filed in your name.

If you're a victim of tax identity theft, the IRS has a couple of online guides to help: Taxpayer Guide to Identity Theft and Identity Protection: Prevention, Detection and Victim Assistance.

You also can find more tips on preventing tax ID theft tips or recovering when a crook used your information to file a fraudulent refund at my posts Don't become a tax identity theft victim and Fear you might be a tax ID theft victim? Here's what to do.

Here's hoping that with free credit freezes and tax identity theft prevention steps, you'll never have to deal with a criminal pretending to be you.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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