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How can online banking help you manage your taxes?


It's important to hang onto some financial paperwork, but online banking can serve as a perfect life preserver if you're drowning in a sea of documents.
It's important to hang onto some financial paperwork, but online banking can serve as a perfect life preserver if you're drowning in a sea of documents.

Although some people experience anxiety when it comes to dealing with financial matters over the Internet, the practice is fairly secure as long as the Web site has a valid security certificate and your password is strong. It's no surprise then that online banking has become a growing trend. A 2009 survey conducted on behalf of the American Bankers Association found that for the first time, more than a quarter of U.S. bank customers preferred online banking to other methods such as visiting their local branches, using ATMs or banking over the phone [source: ABA].

While online banking offers enormous day-to-day convenience by allowing customers to bank from the comfort of their homes (and without the annoyance of a phone tree), it can also be of great service on special occasions. Namely, that delightful day each year when a person decides to sit down and deal with his or her taxes.

The IRS has jumped on the Internet bandwagon in a big way, and in 2008, about 90 million people filed their taxes online [source: IRS]. Those who also engaged in online banking throughout the year probably recognized how the two activities synergize to make the entire process a lot less painful and problematic.

Gone are the days of collecting and saving formidable stacks of receipts and records. With online banking, that information is all available at the click of a button. Some banks also offer features like a service that allows you to tag any tax-deductible expenses you accrue throughout the year and another that generates a report to summarize your annual spending habits.

On the next page, we'll look at a few more ways your computer can endear itself to you during tax season.

 


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