Online Tax Preparation

With income tax season coming into full swing, the Better Business Bureau is receiving a growing number of consumer inquiries about web-based services that prepare and file income taxes online. Online tax preparation and filing services can offer speed and convenience for tax filers. Just make certain you deal with a web site operated by a reputable service or business, rather than a scam artist.

David Polino, President of the BBB urges taxpayers to do some basic research before giving sensitive personal tax and financial information online. "You should check out a company's status with the BBB before handing over sensitive information to them." Here is a partial checklist for any taxpayer that is considering a web-based tax preparer.

• Verify the tax preparer's identity. Work with a company you are familiar with or one that has been recommended by family, friends or colleagues. If you cannot find basic information such as name, address and telephone number, do not deal with that company. Look for a reliability seal such as BBBOnLine. Talk to someone who has used the company's service. Were they satisfied?
• Look for credentials. If a tax preparer's web site makes claims such as "certified public accountant" or "enrolled agent before the Internal Revenue Service", verify that information. Certified public accountants are licensed by various states. Most enrolled agents are members of their state's society of enrolled agents.
• Consider security and privacy issues. If you do decide to prepare and file your taxes through an online service, be certain that the electronic forms and payment pages are secure. The URL at the top of your web browser should read "https://". The "s" is important. If it is not there, you are not at a secure site. The information you submit is not encrypted and it could be intercepted. Or, look for the key or closed padlock symbol on the web site. If you are not sure that you are visiting a secure site, do not type sensitive personal financial information into any part of the electronic form on the web page. Also, check for a privacy policy on the site and review it thoroughly to make certain you agree with how your personal information will be used.
• Keep good records. Print out and keep a hard copy of any information that you type into an electronic form, before you click the "submit" button. You should also print out a copy of any guarantees or promises of help if you are audited. Keep in mind that an internet-based tax preparer in another state may not be willing to come to your location if your taxes are audited.

This information is general in nature and is not intended as a reliability report on any company, product, or service.