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Economy’s effect on tax filing methods

February 27, 2010

The struggling economy apparently is affecting tax filing. And I'm not just talking about individuals having trouble paying what they owe Uncle Sam or their state tax collectors.

The actual business of filing seems to be sensitive to these tough fiscal circumstances, with it looking like hard times help one tax-related sector, but hurt another.

Last week, a market analyst with Oppenheimer told his clients that in this soft economy, worried consumers have looked for ways to trim costs, including  preparing their taxes themselves instead of paying a fee to have someone
do it for them.

The evidence of such a shift?

Intuit's latest report on its TurboTax
product showed growth for the software of more than 11 percent compared with a year ago.

Meanwhile, Kansas City-based H&R Block announced that its preliminary tax season numbers ending Feb. 15 showed same-office tax returns prepared in retail operations dropped 5.6 percent from the same period in 2009. Block's total number of tax returns prepared dropped 6.3 percent year-over-year.

So do these two company earnings reports really mean that folks are truly trading paid tax preparers for self-preparation options?

It will take more than one set of
numbers to reach a solid conclusion. In fact, just a few weeks ago a survey found that more folks are turning to tax pros for tax help.

But these latest Wall Street figures do indicate a trend worth watching by
taxpayers, tax preparers and investors with shares in tax sector businesses.

Take our poll: The early tax-filing filing pattern reports
raise, as usual, even more questions.

Is the IRS' own Free File program
contributing to this trend? 

As the April 15 filing deadline gets closer
will folks who've been putting off their taxes decide they need personal tax pro help?

While decidedly unscientific, let's see if Don't Mess With Taxes readers can add some more fuel to the filing method fire via this short poll:

How do you file your taxes?
Download tax preparation software onto my own computer.
Use an online tax software preparation program.
Head to the IRS Free File site.
Turn everything over to a paid tax preparer.
Bug my accountant cousin until she agrees to help me file!
I'll worry about it in October.

  

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Credits/Deductions
Disasters
Family
Filing and Paying Taxes
Politics/Laws
Refunds
State Taxes
Tax Brackets/Inflation
Tax Tips
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