When a third party efile tax prep site wants your bank information, how am I protected from identity theft?

Question

Third party means someone other than IRS or a well known tax prep site, like H&R Block. Sometimes there's a savings from using a third party tax prep and efile.

Answer 1

You'd have to give them your account number in order to have your refund direct-deposited, although they don't need your PIN or anything like that. When I do taxes for people who are signing their return with a PIN, I specifically tell them not to use one that they use for a bank account or any other confidential purpose.

When you have your taxes done by anyone, you are trusting them with information that would make identity theft possible such as your entire social security number. So be sure you trust whoever is doing your taxes.

I'm not sure why you exclude H&R Block from your question. While some of their preparers are long-term employees, many are just hired for the season, and given basic training in tax preparation.

Answer 2

Rule number one is simple - use common sense. Don't give strangers your information, don't click on things that say you won a contest/lottery you never entered, remember nobody will give you anything for free or for clicking on a banner, only give away your full SS number to banks and taxes (jobs only need the last 4), and don't search for illegal things. Other things are to install a good firewall, virus/spyware scanner (viruses do sometimes steal your information), and try to stick to sites you know are safe (or your friends know are safe). Also I suggest using a service offered by many banks that creates a one time use credit card number. This "card" will be used for that payment only than become disabled, so even if someone acquired it they couldn't use it. Paypal has such a service, and several banks do as well. If you think someone got a hold of your information inform your bank(s) and have them change your account numbers, also contact the credit agencies and have them put a block on your credit report to prevent anyone from using your credit. It could also be worth signing up for a service like Lifelock, who will do all that for you.