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As tax season approaches, it’s more important than ever for business owners to be vigilant about securing their sensitive financial data from cyber threats. Cyberattacks are becoming more and more sophisticated, and a cybersecurity plan is critical for preventing potential breaches and data theft.

As Richard Clarke, former White House Cybersecurity Advisor, put it: “If you spend more time on coffee than on IT security, you will be hacked. What’s more, you will deserve to be hacked.”

Of course, strong cybersecurity is important at any time of year. Why focus on tax season? Let’s explore the answer to this question and more below.

Tax Season Means Increased Vulnerability

Businesses are at a higher risk of cyberattacks during tax season for several reasons. For one, tax season often prompts a surge in phishing emails and fraud attempts as cybercriminals attempt to capitalize on the urgency and stress associated with meeting tax deadlines.

“Tax season can be stressful after particularly turbulent years or when you’re early in your career,” said Jack Savage, Chief Executive Officer of Everyday Dose, a company that specializes in mushroom coffee. “That type of pressure can inadvertently make anyone more likely to be taken advantage of by hackers.”

The increased volume of financial transactions and handling of sensitive information represent a lucrative target to hackers, and reliance on digital platforms and electronic filing solutions introduces vulnerabilities as well. Tax season is prime time for cyber attackers to gain unauthorized access to your systems.

What Are Strong Cybersecurity Strategies To Implement During Tax Season?

With the above concerns in mind, it’s important to create a robust security plan to keep your business safe this tax season.

1. Employee Training

Step one of protecting your business is educating your employees about the importance of cybersecurity practices, such as identifying phishing emails, creating strong passwords, and recognizing suspicious activities.

“At this point, most employees have been exposed to cybersecurity as a concept already,” explained Joseph Chak, Director of eHobby Asia, a company known for their airsoft guns. “However, it’s always wise to refresh their knowledge of how to identify potential threats.”

Conduct regular training sessions to keep employees informed about the latest threats. Phishing simulations, also known as spear-phishing, can help identify possible weak spots in the company ahead of tax season. Ensuring employees know that cybersecurity is a priority organically ramps up their awareness of potential threats, making them a key defense in the war against cybercriminals.

2. Update Software and Systems

All software, operating systems, and applications need to be up-to-date with the latest security patches. Cybercriminals often exploit vulnerabilities in outdated software to gain unauthorized access to systems.

“Failing to stay on top of software updates essentially leaves the door open for cyber attackers to infiltrate,” warned Raunaq Singh, Founder & CEO of Roam Home, a company that helps you find assumable mortgage listings. “Whether you’re talking about a vulnerability in the operating system or an update to fix a flaw in a widely-used application, software patches are a crucial line of defense against potential threats. Your IT department will already be aware of this, but the whole company should keep an eye out for these breaks in your armor, so to speak.”

By prioritizing software updates and security patches, business owners can reduce the risk of falling victim to cyberattacks and safeguard their sensitive information from malicious actors.

3. Use Multi-Factor Authentication

Implement multi-factor authentication (MFA) for employees accessing sensitive systems and accounts. MFA adds an extra layer of security by requiring users to verify their identity through multiple methods, such as a password and a one-time code sent to their mobile device.

“Many workers find it annoying, but MFA is essential these days,” advised Sanford Mann, CEO of American Hartford Gold, a company that can help you invest in a gold IRA. “It’s easy for hackers to guess your password. It’s less easy to guess your password and hack into your phone to get a six-digit code that expires in ten minutes.”

Most platforms have security settings that allow you to require MFA upon login. Options to verify login information typically include one-time codes sent via text, phone call, email, or by logging into an app.

4. Encrypt Sensitive Data

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Encrypting sensitive data involves converting it into an unreadable format using encryption algorithms, making it nearly impossible for unauthorized users to decipher it, even if they gain access to it. This process is essential for safeguarding sensitive information from unauthorized access, data breaches, and cyberattacks.

“Encryption features are often built into software platforms,” shared Shaunak Amin, CEO and Co-Founder of SwagMagic, a company that offers employee appreciation gifts. “Encryption protocols such as SSL/TLS can also protect data transmitted over networks, which is a potential weak spot during tax season. Be sure to securely store encryption keys to prevent unauthorized access.”

Encrypting sensitive data is important for maintaining data confidentiality and integrity. In the event of a data breach or unauthorized access, encrypted data remains protected, mitigating the risk of exposure and potential legal and financial liabilities. Additionally, encryption helps businesses comply with regulatory requirements and industry standards regarding data protection and privacy.

5. Secure Network Infrastructure

Secure your network infrastructure with firewalls, intrusion detection systems (IDS), and virtual private networks (VPNs). These tools help monitor and control network traffic, preventing unauthorized access and potential data breaches.

“Firewalls are like the air traffic controllers of cybersecurity,” explained Bob Craycraft, CEO of Cadence. “They filter incoming and outgoing traffic based on predefined security rules and help block malicious traffic and unauthorized access attempts, all of which minimize the risk of a data breach.”

Intrusion detection systems complement firewalls by continuously monitoring network traffic for suspicious activities, while VPNs provide a secure encrypted connection for remote users accessing the business network over the internet. Together, these systems form a comprehensive security infrastructure to help protect your business during tax season and throughout the year.

6. Regular Data Backups

Implementing a regular data backup strategy is essential for continuity and resilience against cyber threats such as ransomware attacks and system failures. By routinely backing up critical business data, you have access to vital information even if your primary systems are compromised or inaccessible.

“Where you store those backups is just as important as regular data backups,” warned Greg Hannley, Founder and CEO of Soba Mesa. “Off-site backups, such as external flash drives stored in a separate physical location, are solid options. Cloud-based backup solutions can also be highly efficient and reliable for data recovery.”

Regularly testing and verifying backups are also essential components of a robust data backup strategy. Proactively safeguarding data means minimal disruption in the event of a security threat, keeping both your and your customers’s data safe and secured.

7. Limit Access Privileges

Anoyher method for reducing cybersecurity threats during tax season is simple: Restrict access to sensitive financial information to only those employees who require it to perform their job duties.

“Unless your team is exceptionally small, there should always be a hierarchy of information-sharing,” said Brandon Adcock, Co-Founder and CEO of Nugenix, a company known for its Instaflex Advanced joint supplements. “Even with the best intentions, people are prone to making mistakes. The fewer people with access to sensitive financial information, the less likely that information inadvertently gets in the wrong hands.”

Implementing access privileges can also minimize the risk of insider threats and unauthorized access. This is particularly important during tax season, when more individuals than usual may be accessing your business’s financial data.

8. Monitor for Suspicious Activities

Security tools that monitor network activity for suspicious behavior are essential parts of your cybersecurity infrastructure. These tools, such as intrusion detection systems (IDS) and security information and event management (SIEM) systems, analyze network traffic in real time to identify suspicious behavior that may indicate a security incident.

“Your system should monitor and catch events like multiple failed login attempts or logins from unusual locations,” advised Emily Greenfield, Director of Ecommerce at Mac Duggal, a company that offers mother of the bride dresses. “Most of the time, they’re going to be innocuous. However, every once in a while, you’ll catch a real threat, and it’s important to stay on top of where those are coming from.”

Prompt investigation and response to security incidents are essential components of effective cybersecurity incident management. By detecting and mitigating threats in a timely manner, businesses can minimize the risk of data breaches, protect sensitive information, and safeguard their operations and reputation.

9. Stay Informed and Adapt

Staying informed of the latest cybersecurity threats and trends affecting businesses during tax season is essential for any business. Consider subscribing to reputable cybersecurity news sources, participating in industry forums, and collaborating with other businesses to share insights and best practices.

“Technology changes fast, and staying on top of trends in cybersecurity can sometimes feel like a full-time job,” Justin Soleimani, Co-Founder of Tumble, a company known for its washable rugs, admitted. “That’s why investing in good infrastructure and IT is so important.”

Participating in industry forums and online communities allows businesses to engage with cybersecurity experts and exchange insights while collaborating with other businesses facing similar challenges fosters a collective approach to cybersecurity. Both of these approaches allow business owners to stay on top of cybersecurity challenges as they evolve.

Filing With Peace of Mind

By implementing these cybersecurity strategies, businesses can minimize the risk of data breaches and cyberattacks during tax season, safeguarding their financial information and maintaining the trust of their clients and stakeholders.

Stephane Nappo, Global Head of Information Security for Société Générale International Banking & Financial Services, said, “It takes 20 years to build a reputation, and a few minutes of cyber-incident to ruin it.”

Don’t let that be the story of your business. Cybersecurity is an ongoing process that requires vigilance and proactive measures. When done right, it will allow you to stay ahead of evolving threats.