Taxes - any disadvantges to E-file?

[SC]

Is anyone (besides myself) concerned with the security aspects of keeping your tax records on your computer that could be hacked by ciber-thieves and to the issues with sending them electronically ?

Hi MB, as you can tell I share your concerns about sending this information electronically, and I don't see a good solution there. On the security aspects of keeping your tax records on your computer, you can reduce the risk significantly with something like this:

1. Install a program like TrueCrypt (http://www.truecrypt.org/). Use it to create an encrypted virtual disk, about 1GB or so should do the trick. You'll have a large file on your disk which is unreadable to anyone else. When you enter your password (or better, pass-phrase), it shows up as a new (virtual) disk drive on your computer.

2. Install any programs that deal with sensitive data on that new drive. Quicken, MS Money, TaxAct, whatever. Configure these programs to save their information to that drive.

3. Dismount that encrypted drive when not in use. If your computer is hacked, or even if it is stolen, odds are that the drive will be dismounted and the bad guys will only find a scrambled file.

It's not perfect; if your computer is so thoroughly 0wn3d that the hacker is watching your every move, they may eventually see you mount the virtual disk. The software may inadvertantly drop bits of your data elsewhere on your computer. And unless you give someone else your password and instructions on how to access the virtual disk, it will be impossible for friends or family to get into it should you be incapacitated.

 

[JohnEyles]

I've been searching for a reason to e-file and can't find one.

I can think of one (which applies to me this year) and that would be if you have a
massive refund due, so you'll get it sooner - time value of money.

Speaking of which, I could use some advice. Mom passed away (1-1/2 years ago)
and sister executing will is being VERY slow about getting forms to attorney doing
estate-tax return and thus I'm afraid I won't get K-1 in time to file my return.
Better to ask for extension, or file now and do amended return when K-1 arrives ?
Also, why should I have income on the K-1 ? Wouldn't the estate pay taxes on any
earnings ? Only difference is I received most (but not all) of my share of the estate
in 2006 (but none in 2005, and there was no K-1 then). Thanks !

 

[JustCurious]

I just used TaxAct online, and it def gives the option of printing as a pdf. You just right click and 'save as'. The pdf goes to your HD.

On a Mac, you also have the option of creating a pdf of anything that you can print. It is built into the printer dialog box. Very handy - I use it a lot.

I'm pretty sure Windows has a utility that can be added to do the same thing.

-ERD50

I recall that I downloaded the program, I did not do it online. Maybe it had the option to save to pdf, I just couldn't find it, and I looked.

 

[JustCurious]

Hi MB, as you can tell I share your concerns about sending this information electronically, and I don't see a good solution there. On the security aspects of keeping your tax records on your computer, you can reduce the risk significantly with something like this:

1. Install a program like TrueCrypt (http://www.truecrypt.org/). Use it to create an encrypted virtual disk, about 1GB or so should do the trick. You'll have a large file on your disk which is unreadable to anyone else. When you enter your password (or better, pass-phrase), it shows up as a new (virtual) disk drive on your computer.

2. Install any programs that deal with sensitive data on that new drive. Quicken, MS Money, TaxAct, whatever. Configure these programs to save their information to that drive.

3. Dismount that encrypted drive when not in use. If your computer is hacked, or even if it is stolen, odds are that the drive will be dismounted and the bad guys will only find a scrambled file.

Don't forget to follow these security measures as well:

4. Build an underground bunker in your back yard at least 10 feet deep using concrete and steel, and only use your computer in the bunker.

5. Do not connect your computer to the internet. If you must use the internet, wear a disguise and go to a public library at least 50 miles from your house and use a public computer.

6. Every night before you go to sleep, back up all of your data and drive to an offsite location at least 30 miles from your house and store the backup data at the offsite location. However, you should only use offsite data locations that employ security measures at least as effective as yours.

 

[Gumby]

I've been using Turbo Tax for a number of years. And I print and mail my returns to the feds and state.

I've been searching for a reason to e-file and can't find one. Printing and mailing takes me less than 30 mins. Even if e-filing would save me half of this time....duh.....who cares?

I don't believe that all the data from my mailed paper returns is keypunched in by fed drones. I think they only pick up key numbers and the rest is left outside their prying eyes unless they have reason to investigate. So, why automate them wanting to know the color of undies you wear when filing?

If the feds want me to e-file so badly, is it not an oxymoron that it can be good for me? Fed desire = youbet advantage? I don't think so.

I have been doing the same thing -- using Tax Cut, printing out and paper filing. I can see no advantage to me in e-filing.

 

[JohnEyles]

4. Build an underground bunker in your back yard at least 10 feet deep using concrete and steel ...

I can't believe you went to all this trouble and neglected to mention that you should
be sure to mix the concrete yourself.

... back up all of your data and drive to an offsite location ...

I think this IS a reasonable precaution. Much as it would suck to have my
house burn down, it would be significant add'l suckiness to lose financial
records like basis info, not to mention info about valuables (for insurance).

 

[youbet]

I can think of one (which applies to me this year) and that would be if you have a
massive refund due, so you'll get it sooner - time value of money.

Speaking of which, I could use some advice. Mom passed away (1-1/2 years ago)
and sister executing will is being VERY slow about getting forms to attorney doing
estate-tax return and thus I'm afraid I won't get K-1 in time to file my return.
Better to ask for extension, or file now and do amended return when K-1 arrives ?
Also, why should I have income on the K-1 ? Wouldn't the estate pay taxes on any
earnings ? Only difference is I received most (but not all) of my share of the estate
in 2006 (but none in 2005, and there was no K-1 then). Thanks !

Well I agree with ya about getting the refund sooner. That would be a reason to efile. But isn't that kind of like treating the symptom instead of the illness? The root problem is that you have a refund coming. And getting that refund a couple weeks sooner is only the tip of the iceberg. They've had much of that money a lot longer than that! So, be like frugal youbet and always owe them money! I admit I got a small refund years ago, but it was a mistake on my part and I've been diligent to not let that happen again!

Can't help in regard to your question.

 

[d]

old dogs, new tricks

 

[JohnEyles]

Well I agree with ya about getting the refund sooner. That would be a reason to efile. But isn't that kind of like treating the symptom instead of the illness? The root problem is that you have a refund coming.

Oh yes, you're absolutely right. I only worked about 200hrs in 2006,
but at a pretty hefty rate, and simply was careless and didn't lower my
withholding enough. Won't make THAT mistake again !

 

[SC]

JustCurious -

You forgot to put a Faraday cage around the computer (in the bunker) so the NSA can't snoop the electromagnetic fields from your keyboard and figure out your super-secret password ("snoogums").

Am I really the only one that keeps Quicken & TaxCut on an encrypted drive? It seems so easy.

 

[KM]

I agree. It's gotta be more convenient for the IRS. I will do it when it becomes free.

QFT.

I say the exact same thing. If it saves the IRS money and is more convenient for them.....why should I have to pay to do it?

 

[JustCurious]

JustCurious -
You forgot to put a Faraday cage around the computer (in the bunker) so the NSA can't snoop the electromagnetic fields from your keyboard and figure out your super-secret password ("snoogums").

Actually, my password is "Bosco".

 

[John Tuttle]

I file electronically. I don't think it is any less secure than the US Mail. However, I don't think you should dismiss the privacy issues out of hand. I don't get a warm fuzzy feeling from reading the privacy statement at H&R Block, (Taxcut.)

http://www.taxcut.com/privacy/

For example.

We may collect information when you prepare or electronically file your tax return using our online or software-based tax programs and services. This information, referred to in this policy as “tax return information,” includes, for example, your name, address and certain other data such as your social security number, income and deductions data, and other information about you and your dependents that you provide to prepare or file your tax return.


It looks to me like they are collecting more than they need to file your return.

 

[mjarzoms]

I just used TaxAct online, and it def gives the option of printing as a pdf. You just right click and 'save as'. The pdf goes to your HD.

On a Mac, you also have the option of creating a pdf of anything that you can print. It is built into the printer dialog box. Very handy - I use it a lot.

I'm pretty sure Windows has a utility that can be added to do the same thing.

-ERD50

For windows machines PDFCreator is a nice free program to print documents to pdf files.
http://www.pdfforge.org/products/pdfcreator