Watch your mail … many “tax-time” forms contain sensitive personal information … including your Social Security number.
As we reach the height of tax season, the mail is full of forms containing a wealth of personal information. Employers were required by law to send out W-2s by the end of January. In addition to W-2 forms, many organizations are required to send out something called “information returns,” better known as 1099s. While most people are familiar with W-2 Forms, which employers use to report wages and tips of employees, not everyone is familiar with 1099 forms.
A 1099 form is used to report certain types of income and financial transactions to the IRS. A copy is required to be mailed to the taxpayer. There are over 30 variations of IRS Form 1099. You may receive a Form 1099 if you had non-wage income such as unemployment benefits, Social Security benefits, interest, dividends, pensions, death benefits, or consulting fees. A 1099 is issued to you if you are paid as a self-employed, independent contractor. For a complete list of reasons why you might receive a 1099 form, read the IRS's Guide to Information Returns at http://www.irs.gov/efile/article/0,,id=98114,00.html
. Issuers of 1099s generally must mail copies to taxpayers by January 31, so you can expect to receive them in your mailbox by early February. Since 1099s contain your social security number, as well as financial information, there is a risk that they can be misused for the purpose of committing identity theft. For this reason, the IRS created a pilot program this year to test the idea of allowing businesses to only print the last 4 digits of your social security number on the 1099.
“A person’s identifying number is sensitive personal information. A risk exists that this information could be misappropriated from a payee statement and misused in various ways, such as to facilitate identity theft. In an effort to minimize this risk, this notice creates a pilot program allowing truncation of individual identifying numbers on certain paper payee statements.”
Businesses are not required to truncate Social Security numbers. Furthermore, the pilot project does not include IRS Form W-2, the most common tax form this time of year. So you can expect that there will be mail in your mailbox that leaves you at risk for identity theft. Your social security number is the key to identity theft, but some 1099s also contain bank account or other financial account information. This is not something you want to fall into the hands of identity thieves!
So what can you do to protect yourself? Here are some suggestions:
- Purchase a locking mailbox – that way, only you can retrieve your mail.
- Never leave your mail in the mailbox overnight.
- If you are away on vacation, have your mail stopped and held at the Post Office until you return home.
- When you move, make sure that you send a change of address to all companies that you do business with, so your forms can come to the right address.
Don't let tax time be any more stressful than it has to be!