More People File Taxes Online, But Hurdles Remain
The Consumer Internet Barometer, produced by The Conference Board, recently surveyed 10,000 households (with about 70% responding) and found that 40% of respondents plan to file their taxes online this year, compared to 34% three years ago. Additionally, about two-thirds of responding households indicated that they have been filing their taxes online for at least the past three years, which is an increase from the 55% who said so in 2005.
Those who do not file their taxes online frequently indicate that they either do not do their own taxes, or that there is some level of concern about the safety of the personal information that they send through the Internet.
Still, it appears that the general sentiment is that consumers are less concerned about filing taxes online than they are carrying out other financial transactions online. About half of U.S. consumers are “extremely concerned” about conducting online banking transactions, 44% say they are similarly concerned with filing their taxes online.
Of those consumers who filed their taxes in 2006, 72% chose to receive their returns by way of the direct deposit options made available to them, while just 15% chose to receive a check in the mail.
Another hurdle that online tax software must overcome is the ease with which its users can file their taxes. Tax code and procedures remain intimidating and obtuse to the majority of tax filers, and this is probably a large reason why many filers are still comfortable with having their CPA handle their taxes for them, though it is most likely the costlier option.
As more Web sites utilize slicker interfaces that are easier to navigate and follow, online tax services should follow suit in the near future. Notifying their users of errors in their filings and helping them to correct them using plain English would be a great start.
While privacy concerns will stick around despite how safe and secure a Web service can make itself, there is much more that can be done to attract tax filers away from traditional means of filing by being more user-friendly and coming up with new ways to present tax filing as a more understandable procedure. There is much convincing to be done, and the rewards for both consumers and these tax services could be tremendous.
Sources:
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3330
http://www.modbee.com/2020/story/221457.html
