|Online tax preparation is easy,
but is it secure?
|By Jenny C. McCune
Millions of taxpayers head to their computers each
tax-filing season to prepare and send their returns. These filers,
however, don't buy tax software.
They just point their mouses to an online tax preparation site and
a few clicks later, their returns are done.
Why are people flocking to the Web to do their taxes?
It is fast, easy and convenient, particularly compared to the old
do-it-yourself, paper-and-pencil method. It's even quicker than
using software since there's nothing to purchase or download and
install on a PC.
"It takes about 10 to 12 hours to prepare a return
manually using pen and paper," says Aaron Horvath, a spokesman
Block in Kansas City, Mo. "The same return prepared on
our site only takes one to two hours."
Is it secure?
Sure, it's fast, but is it safe?
What happens if you start your return, realize you're
missing some filing information and leave a half-prepared form floating
out there in cyberspace? When you relinquish control of your taxes
to an online site, where does your data go and who has access it?
Basically, you are entering all your personal finance
data for the year, as well as your Social Security number and other
identifiers, onto somebody else's computer and using the Internet
to do it. Hacking is a real, if relatively remote, possibility.
"Think about it sweetheart," says Eva Rosenberg,
Agent and the Web's Tax
Mama. "You're nervous about charging something online and
here you are putting all your tax information online on somebody
else's Web site."
Advocates of online tax return preparation, however,
say the process if safe -- as long as the filer chooses a reputable
site that utilizes accepted Web-security features. And, proponents
of the process argue, online preparation actually safeguards taxpayer
information by keeping a back-up copy of returns stored off-site.
"We retain the data for customers for a long
time so if their computer crashes they don't lose their tax return
information," says Atilla Taluy, president of FileYourTaxes.com
of Oxnard, Calif.
Ease is appealing
While security concerns do scare off some potential users, millions
of filers obviously have no qualms. For them, online ease outweighs
Like their software-using brethren, Web preparation
taxpayers note that the system means not having to wade through
and translate tax jargon. The computer tax programs, whether on
a Web site or installed on your computer, interview you as much
as a CPA. And online upgrades are automatic, whereas the PC software
user must reload the new tax rules on his or her computer each filing
Online taxpayers also get to try a site before they
plunk down money for the service. Unlike buying a software program
sight unseen, most of the online tax preparation sites don't charge
you until you hit the "send to the IRS" button. That lets
you play around with the site all you want.