Most People Will File Income Taxes Online, Despite Data-Breach Fears

Death and taxes: 2020 saw far too much of the former and delays on the latter, but both remain inevitable and nothing to look forward to (unless you’re getting a refund). Doing your income taxes is a chore, even now that so many of us are are filing electronically.

How many? We found out via a survey on tax habits, preferences, and fears conducted along with our sister site, Offers.com. We asked 1,075 tax-filing adults in the US on February 5, 2021 via Alchemer (formerly SurveyGizmo) about how they’ll handle the tax season and their concerns.

Some respondents (18%) filed early, in January. The majority planned to file taxes in February (43%), while 26% would wait until March. The numbers go down to 9% for April, then get very specific: 2% would file on April 14, and 1% on tax day itself, Thursday, April 15. Another 1% said they’d file an extension.

Beyond when, we wanted to know how people are filing—we’re not doing all these reviews of the best tax software for no reason. With some relief, we found that tax software is being used by the majority of our respondents, with 18% using paid software and 27% opting for free tools. Then the disbelief set in: That’s merely a bit more than half! Why would anyone not file electronically? But of course, the 20% who drop stuff off with an accountant, the 7% using a virtual accountant meeting, the 6% going to a friend, and so on are all likely going to file electronically eventually. Even the 8% who selected “manually by IRS e-file” are going electronic, even if it’s not via commercial software.

As for the remaining 7% filing manually by mail: We salute your commitment to pen and paper.

Those who are paying aren’t paying much. The biggest slice (18%) planned to spend $51 to $100 bucks; the majority would pay less than $50, all the way down to zero.

The most important criterion for those picking their own tax software is accuracy (27%) followed by the ease of use of the interface (23%). Price is third at 20%. All the other considerations are in the single digits—having access to a live person in a brick-and-mortar shop or even a customer service rep over the phone isn’t that important when the software’s interview interface can walk you through everything step-by-step.

It’s always gratifying when the top choice in our reviews is the top choice with readers, and the proof is here: The PCMag Editor’s Choice pick, Intuit TurboTax 2021 (Tax Year 2020), is the top choice with 38 percent of readers. All the rest are at 13% (H&R Block) or lower.

We asked about people’s comfort level filing via a mobile device. Over a quarter (28%) said they’d be very comfortable, and 18% said “comfortable.” Which is good, as there are plenty of mobile tax filing apps out there—including TurboTax, which has a dedicated smartphone app.

No one who’s filling out income tax forms wants to screw it up. What are the concerns when filing? A full 28% were carefree, claiming they didn’t have any concerns. That’s concerning, but hey, confidence is sexy. More realistically, a quarter of respondents feared making a mistake in their taxes; 21% said they’d be distraught if they missed a deduction or credit and ended up paying too much. Only 7% were nervous about filing on time.

People are also either not comfortable or very uncomfortable (54% total) with filing taxes on a shared or public network—as they should be, unless they’re using a VPN. (Always use a VPN, people—it’s one thing you can control in this crazy world.) Maddeningly, a full 54% of respondents reported that they’re not using a VPN when filing!

Another thing you can’t control is a data breach, when your personal information, stored by a third party (like, say, the Internal Revenue Service), gets hacked and stolen. The breakdown: 39% are concerned to very concerned over the potential compromise of data. Considering the sheer number of breaches in 2020, it’s more than reasonable to be worried.

For another look at the data—including a breakdown of exactly what people would be willing to give up to get out of ever paying taxes again—head over to Offers.com’s interpretation of the results.