Can You Really Trust Online Tax Services?

Can You Really Trust Online Tax Services?
By: Tëa Goodmanson

With tax season in full swing, it’s time to start thinking about how you’re going to file them. In the past, many would hire a professional or just do them by hand. Now, there are endless amounts of online software that can help file your tax returns in minutes. But, are these do-it-yourself tax prep tools the best option? Completely trusting these online resources could harm your taxes, especially if you don’t review your finished tax returns.

One mistake tax services make deal with old law taxes. Because the database’s are so vast, tax services have difficulty completely updating their services. Some services like TaxAct refer to personal exemptions as if they were still in use. For example, services are “still telling customers they could deduct interests up to $1 million of mortgage debt” (Consumer Reports), when in actuality you can only deduct interest up to $750,000 for loans made after Dec. 15, 2017. That is a crazy difference that could totally mess up your tax returns! If you don’t catch a mistake like that or have prior knowledge about a change in tax laws, then it will be challenging to catch a mistake like that.

The major risk of filing your taxes online is the stake at which your personal data is at risk. Services will let you close out of their sites, saving your information without needing to physically press save and log out. Emails that look legitimate from the tax site where you finished your tax returns, can actually be fake. It’s a gold mine for identity theft. Picking the correct, most trustworthy site is an important factor in filing your taxes online. Luckily, the IRS has a list of authorized e-file tax services which will make your life easier. If you receive any type of email that is asking you for passwords, Social Security numbers, or credit card information, forward the email to the IRS at phishing@irs.gov. You need to always be aware of what information you are issuing out to tax services. Like always, be careful about what you share online!

Despite this, there are plenty of benefits from filing your taxes using online websites. There are thousands more success stories than horror stories. You are receiving accurate calculations because of the smart algorithms websites use. There is a smaller room for human error because websites know how to calculate everything properly. Plus, the website will walk you through the whole entire process and is walking you through possible tax credits and deductions you can receive. In addition, it is so nice that you can save your progress and return to filing your taxes at a different time. Preparing your taxes online through softwares actually makes it so you have control over your money and can physically see the whole entire process. It is easier to prepare and file your taxes at your own pace for a cheaper price.

 If you are worried at all about filing your taxes online because you don’t feel comfortable sharing your personal data online, there is absolutely no shame in going to a professional! Using online softwares isn’t for everyone. There is a flow chart included in this article from Business Insider to help you decide which method is best for you. Either way, make sure your tax returns are done and completed in time before time runs out!

Works Cited

Elmblad, Shelley. “Is the IRS E-File Option Safe?” The Balance, The Balance, 22 Aug. 2019, www.thebalance.com/is-it-safe-to-e-file-your-tax-return-1293933.

Loudenback, Tanza. “Should I Do My Own Taxes or Hire a pro? Here's How to Decide.” Business Insider, Business Insider, 24 Jan. 2020, www.businessinsider.com/should-i-do-my-own-taxes-or-hire-accountant.

Neal, Brandi. “How To Keep Your Tax Return Safe This Year.” Bustle, Bustle, 16 Apr. 2017, www.bustle.com/p/is-it-safe-to-file-your-taxes-online-heres-how-to-keep-your-tax-return-safe-51524.

Perez, William. “Should You Pay Someone to Do Your Taxes?” The Balance, The Balance, 12 Dec. 2019, www.thebalance.com/should-i-pay-someone-to-do-my-taxes-3192866.

Stanger, Tobie. “Can You Trust Online Do-It-Yourself Tax Prep? CR's Evaluation Raises Questions.” Consumer Reports, www.consumerreports.org/taxes/can-you-trust-online-do-it-yourself-tax-prep-cr-evaluation-raises-questions/.