Pros: Tax knowledge; They can find additional write- offs you never knew existed
Cons: The fees; Not practical for those with simple returns and small refunds
When tax season hits in the early part of the year, many people procrastinate until the last minute to complete their tax returns. Some pull out the forms, start the coffee maker, and stay up all night on the final day before the deadline hits. Other people are a little more conscientious and try to get their taxes done sooner so they can research the tax codes to find additional ways to reduce the tax burden.
For those who like to conduct research to find loopholes, there are many resources to consult and some can prove to be very useful. But for those whose time is scarce, looking up data can be too great of a hassle. For those folks, consulting a tax service is often the only feasible way to find these additional tax savings. And the most popular tax service of all is H&R Block, a personalized service that helps with tax preparation.
How Does This Service Work?:
H&R Block offers financial services in the following areas:
Tax Prep- The most commonly used service, this allows clients to meet directly with an agent for one- on- one counseling about taxes. H&R Block will go over your tax situation with you and file the forms electronically for you.
Future Planning- Maybe your taxes could benefit from making a few lifestyle changes next year? Perhaps your child is close to leaving for college? Or maybe a new home is in your future? If so, H&R Blocks professional tax agents can help you find ways to use various tax laws to your advantage.
Mortgages- Speaking of buying a new home, H&R Block has a separate mortgage company that can help facilitate your purchase. The company offers refinancing and home equity loans also.
On- Line Resources- H&R Block offers its services via the internet for those who would rather file themselves and they sell special software that you can load on your home PC for tax filing.
Establishing an Account:
With H&R Block, setting up an account is like establishing a relationship. There are thousands of offices all over the country in cities of all sizes, large and small, so a potential customer should have no problem finding a place to visit. Once the account is opened, H&R Block assigns the new clients to a tax professional. This individual will be responsible for completing the new customers tax preparation, looking for additional deductions, filing the taxes, etc. All you, the customer, have to do is supply the necessary information (tax forms, 1099, dividend statements, mortgage interest statements, etc.) and answer some questions about your tax situation and status.
H&R Block could not survive without charging fees and these can really add up if you have a good amount of work that needs to be done with your taxes. Rates vary from place to place, but you can expect to pay a base fee of about $45 which increases to a base of about $65 if you want to include your state tax returns as part of the service.
If you have nothing more to complete than just a basic return, your fee will fall at the low end of the range, which means it will not be much more than $45. But if your tax situation is more complex, then you can expect the fees to slowly inch higher and higher, based on the number of other forms and schedules that are needed to complete the job. If, for example, you have capital gains, then you would need to attach Schedule D to your return. Doing so will add about $15 to the cost. Are interest and dividends part of your taxable income? If so, then Schedule B needs to be added, which will tack on another $15. Each form or schedule you add to your return will add additional costs to your bottom- line fee. And they are not all priced at $15- different forms carry different costs.
H&R Block is the largest and best- known of the worlds individualized tax preparation services. There are more than ten- thousand offices with locations all across the country, just waiting to take you in and add you as a happy customer.
I have worked with H&R Block in the past and I know others who have also used this service. Usually, the reason cited for calling on H&R Block to assist in tax preparation is the hope that these tax professionals will find ways to reduce ones tax burden- hopefully, by an amount greater than the total fees charged. One thing that I have found to be true is that H&R Block personnel really know their stuff. Many of them have worked in tax preparation for years and they can quickly locate different tax loopholes that most individuals may not be aware. Everyone knows about mortgage interest deductions, exemptions for children, etc. But H&R Block people go far beyond this in their quest to reduce your tax burden. They rely on computer databases and other reference materials to find every possible way to cut your taxes. And they dont insult your intelligence by stating the obvious. The ones I have dealt with conduct themselves in a respectful, professional manner. I have heard some horror stories involving H&R Block personnel, but I have never experienced anything negative.
The decision to use a tax preparation service often boils down to time and cost. And for some, services like H&R Block can prove to be worth the bother because of limited time. Many busy professionals do not have the necessary time to deal with tax filing and prefer to let companies like H&R Block do the work for them. For others, it comes down to cost/benefits. If the total fee for filing your returns is less than the benefits (the additional tax return that H&R Block is able to generate), then H&R Blocks is worth paying for. If the fees are greater, then H&R Block isnt worth it. Since no one really knows, when they visit H&R Block, whether or not its service will result in a greater tax return, one has to use judgment in making a decision. If your taxes are very simple and you have few or no potential write- offs, then this service could prove to be a waste of money. On the other hand, if you are a home owner who has capital gains, interest, 1099 income, private business in the home, etc., then H&R Block can be a valuable resource. You would be surprised at the tax loopholes H&R Block professionals are often able to find and these additional write- offs can have a substantial impact on your refund. But if your tax situation is simple and you are certain that there are not likely any write- offs to find, then H&R Block is a waste of your hard- earned cash.
I have noticed that H&R staffs its offices with people who have varying levels of tax knowledge to handle varying levels of tax return complications. Simple returns are handled by one group of professionals. More complicated returns are handled by another group of professionals. I have only dealt with those in the latter group, so I cannot comment on the others. But again, if your tax return is really simple, I dont see the point of using a service like H&R Block in the first place. Why pay $45 or so for a service that you can complete yourself in a matter of minutes?
To help customers make the payments of fees, H&R Block offers a few options. You can pay the stated fees up- front and be done with it, or you can pay them after you receive your refund (assuming youre going to get a refund). If you opt for the latter, you can expect (of course) to pay some additional fees. Also, depending on which option you select for receiving your refund (they have a few to choose from), you could have additional fees to pay that could be as low as $25 or could be computed as a percentage of your refund. If your refund is substantial, then the percentage method may end up very costly. These more expensive methods are intended for people who need their refund money asap and cant afford to wait. In effect, what H&R does in this case is give you, the customer, a bank loan for the amount of your refund, less any applicable fees. Once the actual money is received from the IRS or state taxing agency, H&R Block then pays off the loan for you.
Some people prefer the personalized service of H&R Block and feel its worth the money. This is nice, but unless a person really feels they need this type of guidance or has a complex tax situation, I think it is best to use on- line services like Turbo Tax or H&R Blocks own on- line tax preparation service. It really depends on how much value you expect to get from using H&R Block. Obviously, if you plan to file the 1040EZ form, then it wouldnt make much sense to visit a business like H&R Block. But if you have an unusual tax situation and feel there are potential loopholes to locate, then H&R Block is worth the price. You need to be prepared, though, if you decide to use a service like this one. H&R Block will need to see all of your personal income and deduction records. And dont be surprised if you get several calls over the course of a few days asking for more and more information. As your personal tax professional finds more possible ways to reduce your tax burden, he/she might need to speak with you directly to see if you qualify and might need to request more and more documentation. You have to be patient and cooperative if you want H&R Block to minimize your taxes.
Personally, I dont see the use of companies like H&R Block much anymore. With the popularity of the internet and do- it- yourself products like Turbo Tax, I really dont see any reason to pay these high fees that H&R Block charges. My situation could change at some point in the future and I might need a personalized service like H&R Block once again at some point in the future. It is a decent service and it often pays for itself with its effective tax reduction strategies and added loopholes. I will continue to conduct my own research and file my own returns electronically but I still recommend H&R Block. Depending on your situation, these tax professionals can really make a difference in reducing your liability to Uncle Sam.