Between filing payroll taxes, preparing 1099s, and managing business deductions, it’s easy to overlook cybersecurity. Criminals know this, so you should stay alert. 

Cybercrime spikes around tax season, targeting sensitive business data like employee Social Security numbers, bank accounts, and business tax IDs. Taking a proactive stance will help you protect your company, your employees, and your finances. And these tips will help keep you protected all year, too! 

Why small businesses are at risk

Short answer? Tons of sensitive data that might not be well protected, and a lot of money moving around during tax season.

Cybercriminals often impersonate the IRS, tax software companies, or financial institutions to trick business owners into sharing sensitive data. Small businesses are especially vulnerable because they may lack dedicated IT security teams, leaving gaps in employee training, software security, and data-handling practices. Some criminals even try to impersonate businesses to scam their vendors.

Small business cybersecurity steps for tax season: Your checklist 

1. File early and monitor your situation  

Filing taxes early reduces the window for criminals to use stolen tax IDs. We recommend you file as soon as you can. After filing, monitor IRS notifications and your business bank accounts for unusual activity. Any signs of fraudulent filings should be reported to the IRS immediately.

2. Secure your business accounts with MFA 

Enable multifactor authentication (MFA) wherever possible, including payroll software, bank accounts, accounting platforms, and any cloud-based tax systems. MFA adds an extra layer of protection beyond passwords, reducing the chance that attackers can access your accounts even if credentials are stolen. MFA can take many forms, including facial scans, codes texted to your phone, or codes created by an app. Don't share your MFA codes with anyone! 

3. Protect your devices and networks with software and firewalls 

Install and maintain antivirus software, enable your firewall, and keep operating systems and applications updated. Use encrypted document portals to secure sensitive files, especially those containing employee or client information.  

4. Backup critical tax and financial data 

Maintain both digital and physical backups of payroll records, accounting files, and tax documents. Store encrypted digital copies in the cloud or on external drives and keep paper copies in a secure location. Regular backups help protect against ransomware, hardware failures, and accidental deletions. 

5. Train your team 

Employees are your first line of defense against phishing and scams. Educate staff to recognize suspicious emails, especially those impersonating the IRS or other financial institutions. Remind them never to click links or download attachments from unknown sources, and to report anything suspicious immediately. 

6. Watch out for Business Email Compromise (BEC) scams 

Business Email Compromise (BEC) is a type of cyberattack where criminals impersonate executives, vendors, or trusted partners to trick employees into sending money or sensitive information. They do this by creating emails that look so convincing they could be real vendor emails. During tax season, BEC scams often target accounting or HR staff with fake requests for payroll tax payments, W-2 forms, or IRS-related instructions. 

7. Share tax documents securely 

Don't send sensitive business or tax documents via regular email. Use encrypted file sharing portals or secure cloud services. If working with a tax professional, confirm they follow strong cybersecurity practices such as limiting access to sensitive data and using secure portals for uploads. Don't be afraid to ask them questions about their security practices! 

8. Develop a security plan 

Even a small business should have a simple information security plan. Include steps to prevent unauthorized access, detect suspicious activity, and recover from potential data theft. Keep contact information for local IRS stakeholder liaisons or cybersecurity professionals handy in case you need assistance. For more help in developing a plan, contact us about the CyberSecure My Business program! 

Secure peace of mind this tax season 

By implementing strong account protections, training employees, and backing up data, small business owners can significantly enhance their protection against tax-related cyber threats. Secure your business and your team! For more practical tips, guides, and checklists for keeping your business safe online, subscribe to our email newsletter. The NCA's CyberSecure My Business program is an excellent option for small businesses and doesn't require a tech background!