Is It Safe To File Your Taxes Online? Here's How To Keep Your Tax Return Safe
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Tuesday, Apr. 18 is Tax Day 2017, and unless you filed for an extension you'll need to file your taxes by midnight, either by mail, or online. If you detest the mail like me, you might be wondering if it's safe to file your taxes online. While it might seem absurd in 2017 to consider another option, online tax fraud is on the upswing so there are a few things you should know before e-filing your tax returns.

In 2016 CNBC reported that an audit conducted by internet security nonprofit the Online Trust Alliance found that 46 percent of software websites in the IRS Free File program — which lets taxpayers who earned less than $64,000 prepare and e-file a return for free using name-brand software — failed cybersecurity protocols.

Despite the security failures, Tim Hugo, executive director of the Free File Alliance said in an email statement to CNBC that the software is up to industry standards. "All Free File companies are evaluated and tested each year to ensure that they meet IRS standards addressing every aspect of security and privacy," he said in his statement.

According to the article, safe tax-filing websites include tax preparers like Intuit's TurboTax, H&R Block, eSmart Tax, exTaxReturn.com, Free Tax USA, TaxAct, and TaxSlayer, so if you're using one of these you're probably OK.

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Additionally, the IRS reported that tax-related phishing emails and malware surged 400 percent during the 2016 tax season. According to the IRS, the emails are designed to trick taxpayers into thinking they are official communications from the IRS or others in the tax industry, including tax software companies. Emails tend to seek information related to refunds, filing status, confirming personal information, ordering transcripts, and verifying PIN information.

As someone who has been the victim of identity theft, putting all of your personal information into cyberspace can be scary. The IRS advises that you be on the look out for tax scams via email, especially those requesting last-minute deposit changes for refunds or account updates. Generally, the IRS will never contact you via email or phone; they will contact you by mail.

A recent press release from the IRS details one new scam that poses as you asking your tax preparer to make a last-minute change to your refund destination, often to a prepaid debit card.

"The IRS urges tax preparers to verbally reconfirm information with the client should they receive last-minute email request to change an address or direct deposit account for refunds," the press release states.

If you have a tax preparer (an accountant), make sure you speak to them about this, and let them know you would not request this type of refund.

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The IRS also notes another scam that targets taxpayers via email. This one appears as a fake email from your tax software provider asking you to update online accounts.

"Taxpayers should learn to recognize phishing emails, calls, or texts that pose as familiar organizations such as banks, credit card companies, tax software providers or even the IRS," the press release states. "These ruses generally urge taxpayers to give up sensitive data such as passwords, Social Security numbers and bank account or credit card numbers."

If you receive one of these emails the IRS advises you to forward them to phishing@irs.gov. They also remind taxpayers that they do not send unsolicited emails or request sensitive data via email, and advise the you should never open an attachment from a phishing email (neither the IRS nor your tax software company would send you an email with an attachment).

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Unfortunately, with every technological advance comes a new scam. While you can't always protect yourself 100 percent from being a victim of online fraud, using common sense can help you stay safe.

  • Only e-file your taxes with one of the reputable tax websites like TurboTax, H&R Block, eSmart Tax, exTaxReturn.com, Free Tax USA, TaxAct, and TaxSlayer.
  • Remember, if something seems to too good to be true it probably is. Do your research before using an online tax service.
  • Don't provide any information over email, and if you receive an email asking you to update your password, do not click on the link. Go to the website instead by typing in the URL.

While taxes are a necessary, albeit unfortunate, part of adulting, educating yourself can help keep you, and your tax return, safe out there in cyberspace. OK, now that we've got that out of the way, go treat yourself to a 2017 Tax Day deal. You deserve it.