As you can see from the news story below, H&R Block has reported a drop in the number of tax returns its retail locations have prepared so far this year. The company attributed the decline to cost-conscious consumers seeking cheaper alternatives, including doing their taxes on their own. Now, I'm obviously no big fan of H&R Block and certainly won't lose any sleep over their decline in numbers, however, the report does point to a potential area for concern for taxpayers.
Sure, when times are tough, people are going to look for ways to cut costs. But while they may save a few dollars in tax preparation fees by doing it themselves, they could actually cost themselves more than they save. There's a reason why tax professionals get paid for what they do. It's because we've got the training and experience and knowledge of the tax code to make sure that people get the best possible result. Now tax software is all well and good, but like any computer program, it's only does what you ask it to do. If you don't know the right things to tell it to do, it won't give you the best result. And the sad part is, if you miss deductions you could have taken, you'll never know the difference because the IRS will gladly accept your return anyway.
And even worse than relying of tax programs, people are really taking a risk when they place their faith in cut-rate, fly-by-night preparers. The few dollars they save in prep fees may not be worth the chance they are taking. If a preparer's fees seem are that low, it should send a warning signal that their services are not worth more than that. Remember the old saying: "You get what you pay for."
So where's the happy medium? You need to judge price vs. value. Are you getting personalized, experienced service with year-round availability? That's what you get at Tax Express. And that's why we think we're worth a heck of lot more than some seasonal, inexperienced preparers. At the same time, you won't pay as much as you're likely to at a big tax chain or CPA office.
Now that's a happy medium. Think about it. But not for too long. After all, April 15th is right around the corner.
NEW YORK (Reuters) - H&R Block, the largest U.S. tax preparer, said on Monday that tax returns prepared in retail offices fell 6.2 percent from a year earlier as customers affected by the weakened economy sought cheaper alternatives.
In afternoon trading, H&R Block shares were down 99 cents, or 5.2 percent, to $18.14 on the New York Stock Exchange.
Total returns prepared by retail offices fell to 10.8 million in the January 1-March 15 period from 11.51 million a year earlier. Retail fees rose 1.1 percent to $1.98 billion, as the average fee per customer increased 7.9 percent to $183.79.
The decline in retail tax returns accelerated in March; as of February 28 the year-to-date decline had been only 3.9 percent.
H&R Block said the changes in part reflect a 21.6 percent increase in the number of returns prepared with software and online.
"There continues to be a slight shift from assisted to do-it-yourself tax preparation," H&R Block said in a statement. "This shift is primarily driven by increased price sensitivity of clients due to current economic conditions."
Recent Comments