One of tax return filing season’s biggest financial risks isn’t an IRS audit

Published

3 months ago

February 7, 2025

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Tax season has officially started, so you should prepare to file your 2024 tax return, and prepare for the scammers who are already prowling. Don’t get baited and hooked.

Many people are lax about protecting their personal information online, and there’s more reason than ever to be wary given widespread hacks such as the massive data breach of background check company National Public Data that exposed an estimated 2.9 billion records, including Social Security numbers.

Protecting yourself is important for many reasons, including how time-consuming and difficult it can be to recover from tax-identity theft, said Andy Phillips, vice president of The Tax Institute at H&R Block.

“Consumers need to be thoughtful about how they protect their personal and tax information online to avoid becoming a victim of tax-related identity theft,” he said.

There’s also always the risk that financial need and stress lead people to make hasty decisions when something too good to be true is offered. Nearly 40% of taxpayers will need refunds to make ends meet, according to a recent Credit Karma survey.

There are some basic do’s and don’ts of working with tax professionals that are always the starting point. More than half of taxpayers turn to a tax professional for help filing a tax return, according to the Internal Revenue Service. Choosing a reputable provider can prevent financial harm. Taxpayers should avoid unethical “ghost” return preparers who don’t sign or include a valid preparer tax identification number (PTIN) on every tax return they prepare.

Taxpayers can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find trusted professionals. Choosing a provider affiliated with a recognized national tax association is also advisable. The National Association of State Boards of Accountancy also maintains a database to help consumers check whether their provider is a certified public accountant and in good standing.

Then, there are all the more specific ways that the migration of our tax lives, and daily lives, online introduce additional risks to tax season. Here are several ways consumers can help keep their identities and personal information safe.

Make sure the provider uses secure online processes

Choosing a vetted tax professional is the first step, but when sending personal information over the Internet, be sure your provider gives you a secure link, so the information goes directly to the intended recipient in a secure fashion, said Lisa Greene-Lewis, a spokeswoman for TurboTax.

If your tax professional is asking you to send personal information via email, it could be time to switch providers. “I wouldn’t send important documents over email,” Greene-Lewis said.

File early, or use an IRS pin, to cut down on tax-related identity theft

Fraudsters sometimes try to file a tax return using someone else’s Social Security number. To mitigate this possibility, submit your taxes as early as possible, Phillips said. In many cases, a Social Security number can only be used on one electronically filed tax return, so filing early helps reduce the potential of tax ID theft.

Many people do this already, of course, many because they expect a refund. The IRS estimates more than 140 million individual tax returns for tax year 2024 to be filed ahead of the April 15 federal deadline.

Another option is for taxpayers to request an identity protection pin from the IRS, which prevents someone else from filing a tax return using their Social Security number or individual taxpayer identification number. This pin helps verify the taxpayer’s identity when filing an electronic or paper tax return, adding an extra layer of security. Many taxpayers are eligible to establish a pin online. Otherwise, there’s an option to fill out a PDF and send it to the IRS via postal mail or fax.

Watch out for the fake ‘IRS’ email or text

Thousands of people have lost millions of dollars and their personal information to tax scams, according to the IRS, so it’s important to know the warning signs. The IRS typically contacts people the first time through regular U.S. mail delivered by the U.S. Postal Service. To verify the IRS sent the letter or notice, you can search for it on IRS.gov. Some letters are sent from private collection agencies.

The IRS will never initiate contact with you by email, with a few exceptions such as if you have an account and opt in to email, and criminal investigations. Similarly, the IRS won’t text taxpayers without their permission. The IRS might call to discuss your case, verify information or set up a meeting, but it won’t be unsolicited. In-person visits are also rare, and the IRS generally sends a letter beforehand.

Often fraudulent communications claiming to be from the IRS or associated individuals can have typos or other mistakes in them, but with artificial intelligence, these communications are more sophisticated and scams can be harder to spot. The best advice is not to click on random links contained in an email or text, even if it’s from someone you think you recognize. Emails and texts can be easily spoofed and it’s better to be safe than sorry.

Don’t rush to claim offers about refunds, credits and payments

Scammers often attempt to mislead people about tax refunds, credits and payments. They pressure people for personal, financial, employment information or money. Warning signs of a possible scam include the promise of a large payday, demands to pay immediately or threats if you don’t.

Also, don’t fall for scams where someone offers to seek benefits on your behalf for a portion of the refund. “If someone is charging you a portion of your refund, that is a red flag. You need to walk away,” Phillips said. If they offer to help with the credit, but refuse to sign your tax return, that’s another red flag, he added.

Consumers can read the latest consumer alerts about tax scams identified by the IRS on its website.

Beware of pandemic-related scams still being used today

New scams or old ones with a slightly different twist are always popping up.

In January, the Identity Theft Resource Center warned consumers about criminals who claim, in emails and texts, to be from the IRS in order to trick people into believing they are eligible for a pandemic-related Economic Impact Payment (EIP). Scammers are hoping to ensnare victims into responding or clicking on a malicious link so they can steal personal and financial information that can be used for multiple fraudulent purposes, according to ITRC.

Consumers who receive this type of message should forward it to the IRS at phishing@irs.gov.

“Always being wary and thoughtful of where you are providing your information and what you are sharing,” Phillips said.

Technology

Here are the SpaceX employees who were elected to run Musk’s new company town of Starbase, Texas

Published

5 hours ago

May 5, 2025

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Here are the SpaceX employees who were elected to run Musk's new company town of Starbase, Texas

The SpaceX Starship sits on a launch pad at Starbase near Boca Chica, Texas, on October 12, 2024, ahead of the Starship Flight 5 test. The test will involve the return of Starship’s Super Heavy Booster to the launch site.

Sergio Flores | Afp | Getty Images

Over the weekend, Elon Musk got his new company town along the Texas Gulf Coast. Controlling the city are three SpaceX employees, who all ran unopposed.

As NBC News reported, the election determining incorporation of the city of Starbase concluded on Saturday night, with 212 votes in favor and only six against. Just 143 votes were needed for the measure to pass.

Starbase was victorious in becoming a type C city, which in Texas applies to a previously unincorporated city, town or village of between 201 and 4,999 inhabitants. The city includes the SpaceX launch facility and company-owned land covering a 1.6 square-mile area.

The mayor is 36-year-old Bobby Peden, who has spent more than 12 years working for SpaceX and is currently vice president for Texas test and launch operations. Prior to joining the rocket maker in 2013, Peden was a graduate research assistant at the University of Texas at Austin, according to his LinkedIn profile.

Starbase has two commissioners, both from the SpaceX employee ranks.

One is Jenna Petrzelka, 39, who was an operations engineering manager at SpaceX until July, and now identifies as a philanthropist, according to her application to be on the ballot. She’s married to Joe Petrzelka, a vice president of Starship engineering and almost 14-year veteran at SpaceX.

The other commissioner is Jordan Buss, 40, a senior director of environmental health and safety for SpaceX who joined the company in 2023.

Musk, who has assumed a central role in President Donald Trump’s administration responsible for slashing the size of the federal government, began acquiring land for SpaceX in Boca Chica, Texas, about a decade ago. The first integrated Starship vehicle launched from the site, known as Starbase, in April 2023, and exploded in mid-flight.

The U.S. Fish and Wildlife Service soon disclosed details about the aftermath of the explosion, including that a “3.5-acre fire started south of the pad site on Boca Chica State Park land,” following the test flight.

State and federal regulators have fined SpaceX for violations of the Clean Water Act, and said the company had repeatedly polluted waters in the Boca Chica area. Environmental advocates and indigenous groups have also sued both the Federal Aviation Administration and SpaceX over the company’s flight tests and launch activity in the area.

Those groups said in legal filings that SpaceX caused harm to local habitat and endangered species due to vehicle traffic, noise, heat, explosions and fragmentation caused by the company’s construction, rocket testing and launch practices.

A SpaceX spokesperson didn’t immediately respond to a request for comment.

In a post on X on Saturday, the account for StarbaseTX wrote, “Becoming a city will help us continue building the best community possible for the men and women building the future of humanity’s place in space.”

WATCH: SpaceX launches third test flight of massive Starship rocket

Technology

Hims & Hers gives weak outlook but says more collaborations are coming

Published

6 hours ago

May 5, 2025

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Hims & Hers gives weak outlook but says more collaborations are coming

Cheng Xin | Getty Images

Shares of Hims & Hers Health fell in extended trading on Monday after the company reported first-quarter earnings that beat analysts’ expectations but offered weaker-than-expected guidance.

Here’s how the company did based on average analysts’ estimates compiled by LSEG:

Earnings per share: 20 cents vs. 12 cents
Revenue: $586 million vs. $538 million

Revenue at the telehealth company increased 111% in the first quarter from $278.2 million during the same period last year, according to a release. Hims & Hers reported a net income of $49.5 million, or 20 cents per share, compared to $11.1 million, or 5 cents per share, during the same period a year earlier.

For its second quarter, Hims & Hers said it expected to report revenue between $530 million and $550 million, short of the $564.6 million expected by analysts polled by StreetAccount. The company said its adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the quarter will be between the range of $65 million and $75 million, while StreetAccount analysts were expecting $70.4 million.

Hims & Hers’ stock has had a turbulent start to the year, notching several double-digit moves over the past few months. On April 29, shares rocketed up 20% after Novo Nordisk said it would offer its weight loss drug Wegovy through telehealth providers such as Hims & Hers.

The company said Monday that more collaborations are coming.

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Technology

Hinge Health says revenue increased 50% in first quarter — still no price range for IPO

Published

6 hours ago

May 5, 2025

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Hinge Health says revenue increased 50% in first quarter — still no price range for IPO

Hinge Health’s TrueMotion feature.

Courtesy: Hinge Health

Hinge Health on Monday updated its prospectus to include the results from its first quarter, which showed accelerating revenue growth over its fourth quarter.

The digital physical therapy startup filed to go public in March, but it has not shared a price range yet. Hinge said that revenue in its first quarter climbed 50% to $123.8 million, up from $82.7 million during the same period last year. Hinge reported $117.3 million in revenue during its fourth quarter, up 44% from the same period in 2023.

Hinge said its net income for the period was $17.1 million after taxes, up from a net loss of $26.5 million after taxes during the same period last year.

The company is attempting to go public at a time of extreme economic uncertainty and market volatility, spurred largely by President Donald Trump’s sweeping tariff policy. Several companies, including online lender Klarna and ticket marketplace StubHub, have delayed their long-awaited IPOs.

Hinge’s updated prospectus signals to investors that the company is planning to forge ahead.

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While the company’s revenue jumped 50%, the cost of goods sold fell slightly. That allowed Hinge to lift its gross margin to 81% from 70% a year earlier and record an operating income of $13.1 million after losing $31. 4 million in the same period a year earlier.

Hinge uses software to help patients treat acute musculoskeletal injuries, chronic pain and carry out post-surgery rehabilitation remotely. Large employers cover the costs so their employees can access Hinge’s app-based virtual physical therapy, as well as its wearable electrical nerve stimulation device called Enso.

Daniel Perez, Hinge’s CEO, and Gabriel Mecklenburg, the company’s executive chairman, co-founded the company in 2014 after experiencing personal struggles with physical rehabilitation.

Correction: A previous version of this story incorrectly stated that Q1 2025 was the company’s first profitable quarter. Hinge was profitable previously.

WATCH: IPO window likely to open in first half of 2026: PitchBook