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Identity thieves’ latest scams

—Jason Alderman

If the financial consequences weren’t so damaging, you might almost find humor in how identity theft has butchered the English language in recent years. “Phishing,” “pharming,” and “vishing” are just a few ways criminals access personal information they’ll use to open illicit accounts, rent apartments, or even charge medical procedures to someone’s insurance plan.

Unfortunately, every time authorities plug one hole, crafty criminals figure out new ways to trick unsuspecting victims. Some now even steal children’s Social Security numbers, ruining their credit long before they’ve opened a single account.

To protect yourself and your family, beware of these scams:

  • Phishing: Where you receive an email, purportedly from a trusted source like a government agency or your bank, asking you to supply or confirm account information, log-in IDs, or passwords. Legitimate outfits never ask you to verify sensitive information by email (or over the phone). When in doubt, contact the organization yourself. And never click on the link provided within the email—it could take you to a copycat website capable of infecting your computer.
  • Smishing (for “Short Message Service”): Like phishing, only it uses text messages sent to your cell phone.
  • Vishing (voice phishing): An automated voice message that directs you to call your bank or credit card company. Under the pretext of clearing up a problem (like theft), you’ll be asked to share personal or account information. Keep a list of company toll-free numbers handy, so you can call them directly without fearing you’ve been given bogus information. I also program my banks’ and credit card issuers’ phone numbers—but not account numbers—into my cell phone in case I’m traveling.
  • Pharming: Where hackers redirect you from a legitimate website to an impostor site to harvest (farm) personal data you’ve been asked to provide. Social networking sites like Facebook and Twitter increasingly are being targeted.
  • Skimming: Where crooks use an altered ATM slot and cameras to record account information; also, when dishonest store or restaurant employees use a portable card reader to skim credit or debit card information.
  • Spyware: Illicit software you unknowingly download when you open an email attachment, click on a pop-up window, or download a corrupted song or game. The spyware can then record your keystrokes to obtain account information or ferret out confidential information on your computer.

Don’t forget good-old-fashioned pickpocketing, mail theft, and rooting through your trash.

To reduce your risk of identity theft, always:

  • Shield keypads from the eyes of “shoulder surfers” at stores and ATMs.
  • Shred paperwork and receipts containing personal or account information.
  • Lock up your Social Security card and unneeded credit cards.
  • Carefully scan monthly credit card and bank statements for erroneous charges.
  • Monitor your credit reports for errors or fraudulent activity. You can order one free report per year from the three major credit bureaus at www.annualcreditreport.com.
  • Refrain from making online purchases from unfamiliar websites; and look for “https” in the address.

These are only a few of the precautions you should routinely take to protect your personal information.


Tax deadline approaches

—Jason Alderman

April 15 is right around the corner. If a chill just went down your spine, chances are you haven’t yet organized your income tax paperwork, let alone filed your return.

Even if you can’t file or pay your taxes by April 15, it’s vital to at least request an extension by then; otherwise, the penalty on taxes owed increases dramatically—generally an additional five percent of taxes owed for each month you’re late, plus interest, up to a maximum penalty of 25 percent.

However, if you file your return or request an extension by April 15, the penalty drops to 0.5 percent per month, plus interest. Contact the IRS early if you won’t be able to pay on time; they may even waive the penalty, depending on your circumstances. Call 800-829-1040 or visit www.irs.gov for more information.

Another way to avoid a penalty: The IRS does accept payment by credit or debit card, with a small convenience fee that is tax deductible. Just be sure you can pay off your credit card balance within a few months or the interest accrued might exceed the penalty.

Here are several 2009 federal income tax changes to keep in mind as you fill out your return:

• New homeowner tax credit. If you bought a home in 2009 and hadn’t owned one during the previous three years, you may be eligible for a credit of up to $8,000; in addition, existing homeowners who bought a new primary residence after November 7, 2009, may also be eligible for a credit of up to $6,500. Eligibility rules and deadlines are complicated, so read “First-Time Homebuyer Credit” at www.irs.gov for details.

 

• New vehicle tax deduction. If you bought a new (not used) car, RV or motorcycle between February 17 and December 31, 2009, you can deduct state and local sales and excise taxes, with certain limitations, even if you don’t itemize deductions. Read “Sales Tax Deduction for Vehicle Purchases” at www.irs.gov for details.

 

• Expanded college tax credit. For 2009 and 2010, Hope Scholarships have been replaced by the more robust American Opportunity Tax Credit. Enhancements include:

—Maximum tax credit increases to $2,500.

—Credits can now be claimed for all four years of undergraduate college, instead of only the first two.

—Those with modified adjusted gross income under $80,000 ($160,000 for joint filers) qualify for the full credit; it phases out between $80,000 and $90,000 ($160,000 to $180,000 for joint filers).

—Lower-income families who owe no taxes may file a return anyway and receive a refund for up to forty percent of the credit amount, up to $1,000.

Read “American Opportunity Credit” at www.irs.gov for details.

 

• Unemployment benefits. Up to $2,400 in unemployment benefits is tax-free for 2009.

 

Numerous free or low-cost tax-preparation services are available to seniors, military and low- and middle-income taxpayers, including:

 

• IRS-sponsored programs. (Search “Free Tax Preparation” at www.irs.gov).

 

• AARP volunteers provide free tax preparation to low- and middle-income taxpayers, particularly those over age sixty (www.aarp.org/money/taxaide.)

 

• Military personnel and their families worldwide can get free assistance through a program overseen by the Armed Forces Tax Council. (Check with your base for details.)

 

     

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