Your Social Security number is a valuable asset used for everything from filing your taxes to opening new credit cards. Until recently, most American’s Social Security numbers were secret, but thanks to Equifax, America’s Social Security numbers are effectively open source. But while our information may have been leaked, we should still take steps to be smart and protect ourselves from identity theft.
One method to thwart identity thieves is to be as judicious as possible when giving out your Social Security number. While you may be asked for it from time to time, it’s important to understand when to say yes and when to say no. Read on to learn about who actually needs your social security number and why.
Where to give out your Social Security number
Some businesses and organizations legitimately need your Social Security number, while others simply prefer to have it to make their life a little easier. When these businesses and organizations need your Social, it’s okay to say yes.
Internal Revenue Service
They say there are two guarantees in life: death and taxes. For the latter of the two, you need to use your Social Security number. Every time you file taxes or any other form with the IRS, you’ll need your Social Security number. As the IRS is part of the government and your Social Security number is a government ID number, this link makes a lot of sense.
If you have any self-employment income, you may want to register for a free Employer ID Number, or EIN, from the IRS so you don’t need to use your personal government ID number for business purposes. But when you do your taxes or file other tax forms, you can expect to need your Social Security number handy.
Banks and lenders
Banks are required to follow strict guidelines on who they open accounts for and do business with, and they use your Social Security number to uniquely identify you. A bank may also use your Social to report interest income to the IRS.
When applying for new credit, expect to hand over your Social too. Lenders use your Social Security number to lookup your credit score and credit report, which is the primary factor in deciding who is approved and who is denied for a new loan or credit card.
Cash transactions over $10,000
When you partake in any cash transaction over $10,000, the government tracks it to prevent money laundering. Even if you are doing things on the up-and-up, you’ll need to hand over your Social for these large cash transactions.
When you partake in one of the large transactions in cash, a Currency Transaction Report, affectionately called a CTR, is required. The CTR came into force in 1986 with the Money Laundering Control Act, and requires a Social Security number. If banks find other cash transactions suspicious, even if below the $10,000 threshold, they may choose to file a Suspicious Activity Report (SAR) regardless.