Doing Taxes Online Could Be Risky

Mason City, IA- Accounting offices in North Iowa and Southern Minnesota are starting to fill up with people carrying their W-2's, but the internet is creating a greater amount of competition for tax preparers.

Dan Dannen was preparing tax returns long before the advent of the internet.

"Started doing it in 1985, 1986 somewhere in there did it by paper everything by hand everything by memory," said Dannen, owner of D&S Tax Services.

These days it seems we're flooded with ads for the latest and fastest online tax program's, a simple Google search turns up hundreds of free e-filing software programs.

But Dannen isn't worried about losing his job to the world wide web.

"There's a lot of competition out there, but the problem with some of these software programs is they don't have a lot of help behind it."

Dannen says the internet appears to actually be helping his business, more people are coming to his office with questions about their return.

"We found, on approximately two thirds of them, errors that required redoing the tax return."

If filing returns online isn't hurting tax preparers, the internet is cutting into the amount of mail people are sending.

"This has definitely I don't want to say forced us to do more, but we definitely I don't want to say forced us to do more, but we definitely have to dig a lot deeper now because of there's not near as much revenue coming in because of the shift of the mail and the volume of the mail compared to what it used to be," said Mason City Post Master Scott Pardoe.

He says lines used to run out the door of the post office on April 15th. Now it's just a normal day.

"Let's face it, it's a lot easier and a lot quicker,” he said.

Dannen claims the average taxpayer is missing out on as much as 2000 dollars on their refund, it's part of the reason he thinks his job is safe.

"There's a lot of people who don't feel comfortable or do not wish to take it upon themselves the responsibility so they wanna come to somebody that's been trained," he said.

Dannen says one of the most common mistakes he sees is with retirement and social security information. He says there are about a dozen new federal tax laws this year. He says a simple return will cost a person about $60.