Each year, more and more individuals are abandoning using their mailboxes in favor of communicating over the Internet. Moreover, at tax time, many people think that by filing their taxes online they are taking human error out of the equation as their documents don't have to travel by land and by air to their final destinations. If you are one of those who are contemplating completing your taxes online, you should first consider these pros and cons:
- If you're fairly Web-savvy, filing online can streamline the tax-filing process remarkably. There's less paperwork to keep track of — and you are much less likely to forget to attach a certain document or fill out a specific section because your tax documents can only be submitted if they are complete.
- According to the Internal Revenue Service, some people who file online receive their return in as little as 10 days after submitting their documents. However, usually, when using traditional mail, this process can take on average at least three weeks.
- When you file online, you avoid making your tax documents prone to identity theft if someone were to intercept your mail, which could damage your credit score in the long run and may even result in you missing out on a tax return.
- Although you won't to worry as much about mail theft, the Internet has hazards of its own that could compromise your identity and ultimately affect your credit report. For instance, if you file through a website that isn't secure, a third party could view information, such as your date of birth and bank account numbers, and use them as though they were their own.
- Any information that you store on your computer to help you complete your taxes — for example, scanned copies of your W-2 — could be stolen if your computer is hacked or acquires a virus. Once compromised, this info could be used to steal your identity and ruin your credit.
- For many individuals, filing online is not free if they purchase tax-preparation software. Some programs charge a fee for users that may actually deduct from a state return; filing through the mail will only cost you the price of postage.
No matter how you file, whether online or through the mail, consider enlisting in an identity monitoring program beforehand. This will function like a second set of eyes on your finances and alert you to certain activity taking place in your name or affecting your credit.