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How to Securely Digitally Transmit Sensitive Financial Info During Tax Time


It’s tax time, and for many that means gathering the most sensitive personal and financial information in one place and handing it over to someone else. These days, you’ll more than likely send it digitally.

Before hitting “send,” though, make sure that you understand the security risks involved with digital transmission so you can choose the best option to prevent your information from landing in the wrong hands. While no method is 100 percent hacker- and thief-proof, here are steps you can take when digitally transmitting your information to keep it safer and more secure.

Do Your Research

Tax time brings out scammers and identity thieves by the droves, so if you’re using an e-filing service or a new tax service, do your homework and make sure it’s legit before sending them anything, digital or otherwise. The IRS offers this resource that lists authorized e-file providers in your area, searchable by your zip code.

Beware of Email

When it comes to sending personal information and attachments, sending them via email is easy and convenient, but it’s probably one of the least secure options out there. Even if your connection is secure, you don’t have control over the recipient’s security methods; your docs may be downloaded through an unsecured HTTP connection, which exposes you to identity theft. Add the chance of a missed letter or typo when typing the email address, or a hacked email account, and your information could be compromised.

Encrypt Your Files

No matter what option you use to digitally transmit your sensitive files, make sure you encrypt them first. Encryption is a method of protecting your files so others can’t access them without your knowledge. It’s the same concept as when you make purchases online using your credit card. Your computer encrypts your card information so others can’t steal it during the transaction. In the same way, you can encrypt files on your computer, accessible only with a password, for example.

If you’re new to encryption, here are a few desktop file encryption programs that help you keep your files safe:

  • VeraCrypt is free disk encryption software that’s noted for its ability to decrypt files when they’re needed, but the files are encrypted “at rest” at all other times.
  • 7-Zip is a strong file encryption tool that compresses and organizes files for storage or transmission.
  • BitLocker is a full-disk encryption tool built in to Windows.

Digitally, In-Person

If you plan to deliver your information to your tax preparer in-person in a digital format, you may choose to save it to an encrypted, password-protected USB thumb drive, like this one. You’d need to provide the password to your accountant, but your files would probably be more secure than if you dropped off a manila envelope full of papers.

Try File Sharing

Short of hand-delivering your information, secure file-sharing may be your best bet. File-sharing is the practice of sharing or providing access to digital information, such as documents, graphics, computer programs, images and ebooks; you then give access to others with different levels of sharing privileges.

Dropbox is a popular and effective choice for file-sharing. Because Dropbox encrypts everything you upload and download over a secure HTTPS connection, your files should be secure. You should note, however, that Dropbox’s mobile app doesn’t use an encrypted connection, so be careful not to upload sensitive files from your phone over an open Wi-Fi connection, and make sure who you’re sending it to doesn’t download it with the mobile app.

With Dropbox, you can email a link for your uploaded documents to your tax preparer. Once the transaction is complete, though, make sure to turn off sharing or any links to the documents so your information isn’t compromised in the event that the other party’s email account is hacked. To add extra security to this method, send half the link to your recipient over email, and the other half over text message. They’ll have to type it in manually instead of just clicking on it, but it’s more secure.

SugarSync is another option in which you have control over how you share your files and can invite specific people, such as your tax preparer, to access them. One of the unique options SugarSync offers is Remote Wipe, which allows you to remove all synchronized files from your computer in the event of loss or theft. It also makes it easy to transfer ownership of a computer – Remote Wipe removes all personal data stored in the cloud from a machine. And, because the data remains in the cloud, it can easily be synced to a new replacement device.

A few other file sharing options include MediaFire, which offers a free account and will hold your files for 30 days from the last download, Google Drive and Microsoft’s One Drive.

Do you have a favorite tip or resource for sending sensitive information? Share your recommendation in the comments below.

Kabbage Team

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