Seniors should protect themselves against tax season scams

With tax season underway, millions of Americans will file their taxes before the Apr. 15 deadline. But with so much financial activity going on in such a short timeframe, identity thieves, hackers and fraudulent scammers see more opportunities to take advantage of unaware tax filers. And one of the most common types of scams is the fake charity donation, whereby workers believe their gracious money is going to needy charities, but in fact, it’s pocketed by criminals, according to CNBC.

Because charity donations can be written off on taxes, some still in the workforce are quick to take advantage of the deduction. However, seniors may be most at risk of this tax deception, since baby boomers give 43 percent of all charitable donations - the most out of any age group by far, Software Provider Blackbaud reported.

With many seniors living on fixed incomes, any amount of money lost to a scam directly impacts financial stability.

CNBC noted that U.S. workers may be tricked into donating their hard-earned dollars to fake charities because thieves create false organizations that have similar sounding names to those of real charities.1 Anyone who doesn't catch the deviance will be making a mistaken “donation” but also may be putting their financial information at risk, especially since Blackbaud indicated that donors contribute both in-person and online.

Once banking information is submitted online, criminals may be able to access private data and file false tax returns.

Protect tax documents
A taxpayer may be subject to a tax audit if they deducted a certain amount of money that was listed as a charitable donation, when in fact, the charity doesn't really exist. The IRS may become suspicious of this nefarious activity, and refunds could be delayed.

IRS Commissioner John Koskinen said that we should never provide Social Security numbers or send cash to charities that solicit them unannounced over the phone, according to CNBC.

"When making a donation, taxpayers should take a few extra minutes to ensure their hard-earned money goes to legitimate and currently eligible charities," said Koskinen. "IRS.gov has the tools taxpayers need to check out the status of charitable organizations."

Seniors should be especially mindful of these scams as their age group is a frequent target of criminal activity. Further, with many seniors living on fixed incomes, any amount of money lost to a scam directly impacts financial stability, which is why they may want to do more to keep their income protected during tax season.

For greater financial retirement confidence, you may consider the purchase of annuities.

Get in touch with me to find the best retirement income strategy for your needs. Be more confident you will not outlive your money with lifetime payments.