Last year, over 69 million Americans
used electronic filing, also known as e-file, to file their
income tax returns. Many of these individuals also chose to
use an online tax filing service, or the IRS Free File
program. In fact, the IRS estimates that in 2007, millions of
Americans will take advantage of this option. Yet, while this
number only represents a small percent of those filing a
federal tax return, the number increases each year as more and
more taxpayers discover the convenience and ease of using an
online tax filing service.
There is still, however, a significant
number of consumers who are skeptical about filing their taxes
online. Many of these individuals don’t trust Internet
security, and will tell anyone who cares to listen that they
would “never buy anything online, let alone pay their taxes on
an Internet web site.” What these people don’t understand,
however, is the high level of security that is mandated by the
IRS for any company that establishes an IRS e-file online tax
filing system. In addition, most online tax filing sites will
allow you to deduct their fee directly from your refund,
thereby eliminating the use of a credit card.
In order to use online tax return
preparation software, a tax preparation vendor must apply for
and receive third party privacy and security certification.
They must also be in complete compliance with federal
regulations regarding the privacy of taxpayer information for
all customers. Additionally, these companies may not use any
information gathered in the process of preparing a return for
any other reason than that which has been authorized by the
taxpayer.
All sites that are linked on the IRS
e-filing network must meet with certain security guidelines.
The site must support 128-bit encryption, a feature that
causes the data that you enter on the screen to be scrambled
before it is sent to its ultimate destination. The encrypted
code is then unscrambled on the receiving end, thus preventing
hackers from accessing your personal information.
Secure sites will display a web address
of “https” as opposed to “http” on non-secure sites.
Additionally, there might be a padlock icon in one of your
toolbars also indicating that the site is secure. You can also
check the level of the site’s encryption by either right
clicking in the body of the text or clicking on the “file” tab
at the top of the screen, and then selecting “Properties.”
Either way, a window will be displayed indicating whether or
not the page is encrypted, as well as the level of encryption
applied. Be safe, not sorry!
However, don’t allow concern over
security as an excuse to not file your taxes online. If you
stop and think about it, you are probably less secure going to
an income tax preparation service office and dealing with a
stranger to whom you are giving access to all of your personal
information. Can you be absolutely certain that your most
confidential information is secure, and will not be divulged
to any outside party? Probably not!
Gust A. Lenglet is an accomplished
author and financial advisor in the field of personal finance
and taxation. He is President and CEO of the HBS Financial
Group, Ltd. and offers online tax
filing as well as timely articles and
free information to assist you in tax planning.
Article Source: http://EzineArticles.com/?expert=Gust_Lenglet
http://EzineArticles.com/?Online-Tax-Filing---Addressing-Security-Concerns&id=644440
Is Online Tax Filing
For You? Try It Free With No Obligation
By
Gust
Lenglet
Last year, millions of Americans took
advantage of online tax filing services. In fact, the Internal
Revenue Service offers links to income tax preparation
services on their website, and many of these services offer
free federal income tax filing for people who meet certain
income qualifications.
Most online tax filing sites function
similarly. First, you must establish an account by setting up
a user name, password, and providing an email address. An
email confirmation will be sent automatically, and including a
secure link to the site for confirmation of your
identity.
Once your identity has been verified,
you can begin entering information. These sites are generally
divided into several sections. First, basic information such
as your name, address, filing status, and name of dependents
must be provided. The next section requires entry of
information from your W-2s, and then you will be asked
questions to determine what, if any, deductions you may have
in order to determine your taxable income. Finally, the
program calculates the amount of your income tax, and
depending on your status, the amount you owe or your
refund.
Once all the information has been
entered, you can file electronically. Many sites provide free
federal tax preparation and filing, but charge for the state
tax preparation and filing service. You must pay any fees
prior to the actual filing using a either a credit or debit
card. You will also be asked how your refund should be
processed. Generally, you can choose to have a check sent or
for the money to be deposited into your checking or savings
account.
If you have not previously filed
electronically, you must either sign electronically (you need
to have the previous year’s return to do this), or opt to sign
a paper form, which will be mailed to you after you have
filed.
After you have paid, you will have an
opportunity to print out your return for review prior to
filing. If everything looks okay, your return can be filed.
Click the appropriate button, and then wait for verification
that the transaction was processed successfully. You should
also receive email confirmation of this
transaction.
Anyone who files a 1040EZ or 1040 can
file online with most of the sites. If your return is more
complex, the selection is more limited, and it may be
advisable to use a tax accountant. However, most of these
sites can handle 1099s and business deductions.
Some tax software vendors offer free
online tax preparation depending on your income level. A list
of sites is available on the IRS web site indicating the
income level at which they offer the free filing service. Be
aware, though, that the free filing only pertains to your
federal tax return, not the state.
Once you have used a tax service, your
information is stored for the next tax-filing year. Write down
your user name and password on the hard copy of your tax form,
also noting the site’s address. This will ensure that, next
year, you will be able to log in and proceed without having to
enter any preliminary information.
Gust A. Lenglet is an accomplished
author and financial advisor in the field of personal finance
and taxation. He is President and CEO of the HBS Financial
Group, Ltd. and offers online tax
filing as well as timely articles and
information to assist you in tax planning.
Article Source: http://EzineArticles.com/?expert=Gust_Lenglet
http://EzineArticles.com/?Is-Online-Tax-Filing-For-You?-Try-It-Free-With-No-Obligation&id=641354
View site
map
Contact us for info
File taxes online
with 1040 Tax Preparation, Ltd. Get fast refunds with our
online tax filing.
