Tips For Filing Taxes Safely Online

By Linsey Knerl | February 09, 2011 AAA
Tips For Filing Taxes Safely Online

Like every other aspect of finance, taxes have evolved to include many tech-savvy tools for making them easier. Whether you're equipped with a smartphone or prefer to stick with classic software options for your home computer, there is a method to help tame the madness each spring. Here is a rundown of what to look for in 2011. (From community-based services to free software, there are many free resources to help with your taxes. See 6 Sources For Free Tax Help.)

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IRS2Go Application
This newly unveiled app for the smartphone makes certain aspects of tax filing a breeze to accomplish on the go. The free app is compatible with iPhone and Android devices, and provides registered users with the status of their tax refunds and access to current tax provisions that may make filing easier. The app provides up-to-date information from the IRS to users via their social media accounts. IRS2Go will connect taxpayers to the IRS Twitter account and help them subscribe to emails with daily tax tips.

Online Filing
With 70% of users filing electronically last year, the popularity of this efficient method of filing is expected to continue if not rise. Online tax products abound, from those offered by the major commercial preparers to independent "free file" offerings that use basic calculators to assist lower wage earners.

You don't have to wait until you're ready to file to benefit from online tax services. Most provide unregistered users with a rough estimate of your refund or bill by providing tools that are free to use at any time.

Software Programs
For those who don't choose to house their tax activities online, traditional software options are still available. Software programs for PC and Mac run between $14 and $80, with filing costing extra, in most cases. Users who wish to go this route may find that their favorite tax products go on sale closer to the filing date, and some products will offer mail-in rebates for a portion of the purchase price.

Filing Safely

Before you settle on a method to get your taxes done through technology, it's important to review the basic safety recommendations for dealing with sensitive financial and tax communications. They include:

  • Email Security
    Don't ever give out your social security number of other private information in an email. The IRS will not contact you directly for any kind of verification via your email account, even if you do file online. To ensure that any communication is authentic, contact the IRS directly at the number given on their website or check your tax software account for important notifications.

  • Smartphone Security
    Make certain that your cell phone is equipped with a password-protected screen lock to guard your private information. If you leave your phone in a drawer or shared closet at home or work, keep it turned off and don't auto-save your email account and application log-ins.

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  • Receive Your Tax Refund Directly
    To avoid issues of refund fraud, arrange for your tax refund to be routed directly to your banking account or have it issued on an official debit card. This should be done directly from your tax software, not from an independent website or your email. Contact your tax product customer service department if you have questions or concerns with how to do so safely. (Just because you are in love doesn't mean that a joint return is best for both of you. Refer to Happily Married? File Taxes Separately!)

  • Keep Safe Records
    Make backup copies of all tax information immediately after filing. You can either print it out and store it in a fire-proof safe, or make a back-up disc or thumb drive file to access later. While many software companies store your return information online for up to 5 years, companies can - and have - gone out of business. Take charge of storing your own information in a safe manner to avoid complications down the road.

The Bottom Line
As we see tax regulations change and cost-cutting measures employed, the role that technology plays in tax preparation will likely increase. Staying informed and practicing smart security practices are still the best way to keep your financial info safe and your tax bill low. Early adoption can help you prepare for even more chances in the years ahead. (Use this quick parental guide to help your child learn this process and establish good habits. See How To File Your Child's First Income Tax Return.)

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