okay

Call me a naysayer, but I think its just a matter of time before the IRS gets hacked or some IRS employee looses a laptop loaded with personal info like the pentagon did. Here's some excerpts from a recent AP news story:

" Study: Online privacy concerns increase
By ANICK JESDANUN, AP Internet Writer Wed Jan 16, 1:09 PM ET

Sixty-one percent of adult Americans said they were very or extremely concerned about the privacy of personal information when buying online, an increase from 47 percent in 2006. Before last year, that figure had largely been dropping since 2001.

The Identity Theft Resource Center, for instance, listed more than 125 million records reported compromised in the United States last year. That's a sixfold increase from the nearly 20 million records reported in 2006."

The link has the complete story

Here is a link that might be useful: AP Story

I just phoned in my Ohio state taxes last night. Last year I got my refund the first week in February.

I donÂt want to start a fight but I believe that efiling is "the way to go". IMHO, the fewer people that handle my return, the better. When you mail a return to the IRS, the first thing that happens is the information from your return is input into IRSÂs computers. If someone hacks into IRS computers, your information is there along with everyone elseÂs; plus you have exposed yourself to 2 additional potential problems.

First, your return is handled by the Post Office. While I would like to believe that everyone in the Post Office is honest, I suspect that there might be a few dishonest folks who would love to get their hands on your return.

Second, when you mail your return in and it is input into IRS computers, there is always a chance that the person inputting your information will make a mistake. They might transpose numbers, enter numbers on the wrong lines or even put information on the wrong Form or Schedule. One of the biggest messes I ever had to deal with in my time as a tax preparer was an instance of someone at the IRS putting information on the wrong form. It took well over a year to convince the IRS that they had made the error when entering the return into their computers. I do suspect that more and more forms are being scanned directly into IRSÂs computers so they are working to eliminate the potential for input errors.

I worry about identity theft, but believe that efiling is better than mailing a return to the IRS. Efile your return, have your refund direct deposited in your bank account and you will have your refund in 8 to 15 days. Works for me.

Plus, your info winds up on their computers whether you e-file it or mail it in, so the risk of identity theft from a computer or data storage device being stolen is there either way.

It's the same way with fears over online purchases: You go to a store and people handle your card, and at a restaurant frequently they take it away to run the charge. There's your risk of identity theft -- far more than doing business online, in my opinion.

People feel like "the old way" is safer just because it's more familiar to them, but often the new way is safer.

I e-filing free yet?

Nevermind, I just found out it's $17.95. I'd rather keep that $17.54 for myself, thank you.

If your income is less than $54,000, you can use Free File to do your taxes online and efile for free. Here's a link.

Here is a link that might be useful: Free File

Paper filing is free. Except for a stamp.

Jhug makes good points. I've been e-filing since the 1990s. I've used online banking since then also. E-filing is more accurate, requires less effort, and refunds are processed much more quickly than paper filing. Like Jhug said, free or discounted e-filing is available to many people.

I have my insurance with State Farm. State Farm provides free Turbo Tax tax preparation and federal and state e-filing at no cost to their customers. There are no income limitations.

I much prefer to have my tax accountant do mine. He does e-file them, but I get the benefit of his knowledge and advice. He saves me many times his fee each year--well worth it in my opinion. A website can't help you set your finances up for the next year so you pay the least legitimate tax possible. Of course, the government is pushing e-filing--it's a benefit to them if you want to pay more tax than you need to.

Some accountants know their stuff. Several associates of mine are CPAs and are very knowledgeable. On the other hand, I caught a CPA making a $25,000 mistake on one of my partnership returns several years ago. I owned an eigth of the partnership so it would have been several thousand dollars out of my pocket.

I prepared my own personal tax returns before I took my first tax course at the University of Illinois many years ago. I realize that everyone is not capable of doing complicated tax returns. However, the number of people that spend $150+ to do simple tax returns amazes me. Most of these people go to the H&R Blocks, Liberties, Jackson Hewitts, etc.. They probably don't realize that their "tax accountants" are also taxi drivers, 7-11 clerks, security guards, etc. during the off season.

You don't need to be very bright or knowledgeable to do an average tax return if you use reputable software. You simply need a desire to be in control of your personal finances.

A few years ago, our return was fairly complicated. I did it using tax software, but as insurance, I also had a CPA look it over. He said it looked just fine and had nothing to add.

Since then, we have not had an especially complicated return; I use tax software and efile. If I had a business or a complicated return, I'd use an accountant, but going to a "Tax accountant in a box" like H&R, LIberty, or Walmart for a straightforward return just doesn't make any sense to me at all.

The software easily handles the sale of stocks/mutual funds with the long term/short term issues. Also, it easily deals with depreciation on our rental house.

E-filing eliminates any possibility of the refund getting lost (or stolen) in the mail. Within 10 days, the refund is in our account.

I used a $15 coupon from Costco to buy the software - nearly covers the cost of e-filing.