In today’s digital age, protecting your personal and business information is more important than ever. Whether you're a small business owner, an S-Corporation owner, or just someone looking to safeguard your financial data, these tips can help you stay secure.
1. Strengthen Your Online Accounts
A strong password is your first line of defense. Use a unique password for each account and consider using a password manager to store them securely. Enable multi-factor authentication (MFA) whenever possible, as it adds an extra layer of protection. Finally, be wary of phishing emails or texts—scammers often pose as trusted entities to steal your information.
2. Secure Your Devices
Your devices are a gateway to sensitive data. Make sure they are always updated with the latest software and security patches. Install antivirus and anti-malware software to detect and prevent threats. For added protection, encrypt your files, especially on laptops and USB drives.
3. Keep Communications Secure
Sharing sensitive information via email or unsecured networks can expose you to risks. Use encrypted email services for business communication and avoid public Wi-Fi for financial transactions. If you need to share sensitive details, confirm the recipient’s identity before sending anything. Utilize any applications that your professional service provider uses to allow you to upload your documents securely.
4. Separate Personal and Business Finances
Mixing personal and business accounts not only complicates your taxes but also increases your vulnerability to fraud. Keep accounts separate and monitor them regularly for unauthorized activity. Hiring a bookkeeper can help you stay abreast of unauthorized transactions. If you’re still using paper checks, consider switching to secure online payment systems for easier tracking and enhanced security.
5. Protect Your Documents
Both physical and digital records need proper storage. For paper documents, use a locked, fireproof safe and shred anything you no longer need. For digital files, invest in a secure cloud storage solution with strong encryption. Remember to only keep records for as long as legally required. For tax documents, the requirement is 7 years.
6. Stay Educated
Cybersecurity is an ever-evolving field, so it’s crucial to stay informed about new threats. Train employees and educate yourself on recognizing scams, securely accessing systems, and safely managing data. A little knowledge can go a long way in preventing costly mistakes. You can keep up to date on common scams at https://www.irs.gov/newsroom/security-summit.
7. Comply with Legal Standards
If you handle sensitive client data, compliance with laws like GDPR or CCPA is non-negotiable. Ensure your business and any third-party service providers adhere to these regulations. Not only does this protect your clients, but it also safeguards your reputation. When working with a tax professional, understand that they also have regulations to follow in keeping client information secure. Make an effort to comply with their requests on how to send and receive your information.
In the tax world, keeping information secure isn’t just about protecting yourself—it’s also about your tax professional’s legal obligation to maintain their license. Taking proactive steps to secure your data can save you from costly breaches, identity theft, and save your preparer from compliance penalties.
Do you have additional questions about keeping your financial information safe? Drop them in the comments or reach out directly—we’re here to help!
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