Clever Economy

Be Sure to Do This With Your Tax Software





In recent years, scammers have targeted a growing number of taxpayers. Now, added protections can help guard you from such fraud.

The IRS recently announced that multi-factor authentication will be available on all 2021 online tax preparation products.

With multi-factor authentication, you must provide two pieces of information to access an account or application. The IRS gives an example in which a taxpayer is required to enter a security code sent by text to the taxpayer’s cellphone, in addition to entering their username and password.

This enhanced security feature means that a scammer who has stolen your password can’t necessarily access your account: The scammer also would need the security code.

The IRS says all tax software providers working with the agency have agreed to make multi-factor authentication a standard feature. However, it might not be available on hard-disc products like the tax preparation software sold in stores.

To take advantage of the extra protection, you must first enable it. Check the security section in your online tax product account. There, you can opt in to multi-factor authentication. The IRS notes that the feature may be called by another name, such as “two-factor authentication” or “two-step verification.”

Some tax software programs also offer more information on their websites. For example, TurboTax’s website has a page titled, “How do I enable or disable the two-step verification feature in TurboTax?”

Having a code texted to your phone is not the only way to get this type of security.

Multi-factor authentication apps such as Microsoft Authenticator and Authy are available. These apps generate temporary, single-use security codes that you can use as the second piece of information you must provide when logging into an account.

Other multi-factor authentication options use physical security keys.

The IRS is urging all taxpayers and tax professionals to use multi-factor authentication whenever possible as a way to prevent fraud. According to the IRS:

“Thieves use a variety of scams to download malicious software, such as keystroke logging software. This malware enables them to steal all passwords from a tax pro. Once they have access to the practitioner’s networks and tax software account, they can complete pending taxpayer returns, alter refund information and use the practitioner’s own e-filing and preparer numbers to file fraudulent returns.”

For more on preparing your taxes this season, check out “How to Get Your Taxes Done Absolutely Free.”

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