4 stupid things people do when researching tax information online

Are credit card opening bonuses taxable? When is the deadline for contributing to an IRA?

These are just a few of the questions people will be searching for with tax time just around the corner.

These days, it will not be hard to find the answers online. There are so many good financial websites that you can undoubtedly find the right answer. Unfortunately, there has also been a big growth in unreliable websites too.

The smart consumer has to take extra steps to verify that information found online is accurate. Here are 4 of the common mistakes you should avoid.

Mistake 1: Only reading the first Google result

It’s great to be the first result in a Google search, but it’s silly just how important being first is.

One study found that the first result generated TWICE as much traffic as the second result, and more traffic than the slots 2 through 5 combined. That means a ton of people only clicked on the first result and ignored any subsequent search results.

Yes, these days we all trust Google to deliver quality search results. But don’t take that trust blindly! You will often want to look beyond the first result to verify the information.

Example: When I do a search for “tax brackets 2011″ I am sent to a website called www.taxbrackets2011.com. I have no idea if that site is credible, and the contact information directs me to a PO Box in the state of Washington. Why in the should I trust that result? The site has a high result in part because it has probably optimized itself for Google’s search algorithms. This is not comforting me the site will always have accurate information.

Personally, I will go ahead and look at the second result, from the IRS website, and the third result from the authoritative site bankrate.com to be convinced the information is accurate.

Mistake 2: trusting blogs and expert opinions

Don’t get me wrong, I love blogs and expert opinions. These are often some of the most useful articles as the person has not only read information, but they have often made it accessible and given some personal information.

That said, there is no way I am going to read just ONE opinion and be convinced. I am especially skeptical because so many blogs and experts are shilling out products.

Example: this is not a tax example, but it demonstrates the point. If you do a search for “southwest rapid rewards card worth it,” you will find almost no useful information. Most websites that mention this card are often just trying to get you to sign up for the card. You will have to do your own math about whether the miles and annual fee are suitable for your spending needs.

Mistake 3: Reading outdated articles

It’s not good enough to find information online. Ask yourself: WHEN was the article written?

The tax code has major changes every year, and you have to be sure you are up to date.

You can restrict your search on Google, as of this writing, by clicking on a menu on the left side of the page that restricts searches by date. I find that with tax information it is useful to look for “past month” or “past year.”

(If you’re unsure how to do this advanced search, there is some documentation here)

Example: Do a search for “are frequent flyer miles taxable.” As of this writing, the first few results are from years ago and are not accurate information. You have to do a search limited to the “past month” to find an article from the LA Times that explains how Citi is sending tax forms, but the IRS stance is still unclear.

Mistake 4: Overlooking the IRS website

The IRS website is the only site I ultimately trust when it comes to taxes. This is really a non-point, except when you consider how many people trust articles without checking the source of the tax code!

I always try to verify information from the IRS after reading it on a blog or somewhere else. Sure, it takes a little more time to go through the documents, but it is worth it.

To check the IRS website, do the same search but add this to the end of your search: site:irs.gov

Chances are you’ll get pointed to the official document that explains what you want.

Bonus tip: remember to use CTRL + F!

I would think people know how to find a term on a page. And yet one survey found that 90 percent of people are unaware of the CTRL + F shortcut!

I can’t imagine how much time they waste trying to scan the page for the information.