Slow Spring for Tax Retail

by Doug Desjardins

For the second consecutive year, tax preparers are experiencing a slow tax season with the number of returns declining in a slow economy.

Industry leader H&R Block reports that it’s prepared 6.3 percent fewer tax returns than last year and that its retail business is down 7.6 percent. It did receive some good news in the first two weeks of March, with the total number of tax returns prepared jumping 4.3 percent compared to the same time period in 2009.

“We believe our improved results in March are a combination of an increase in overall return filing trends, a deceleration of assisted returns shifting to digital, a more favorable reporting period and a reduction of market share loss in both our Retail and Digital businesses,” said H&R Block CEO Ross Smyth. “While we reported positive growth for the first half of March, we are still disappointed by our tax season-to-date results.”

To take advantage of the late surge, H&R Block even made the unusual move of staying opening on Easter Sunday to service last-minute filers. And many offices are staying open until 10 p.m. on weekdays and 8 p.m. on weekends through April 14 to capture as many of those procrastinators as possible.

H&R Block and independent tax firms expected the tax season to be slower than usual this year because of the recession and high unemployment. The use of do-it-yourself software programs has also cut into business by making it easier for people to do their taxes at home.

The Internal Revenue Service (IRS) reported that, as of March 12, the number of tax returns filed was down 2.9 percent compared to last year, but that the number filed electronically continued to rise. The IRS said that more than 82% of the 69 million tax returns received so far had been filed online, a 7% increase over last year.

The average refund taxpayers will receive this year is also on the rise. Due to tax incentives in the American Recovery and Reinvestment Act of 2009, the average return will be $3,036, a $266 increase over 2009. “There are several new credits and deductions this year, so we encourage taxpayers to see if they qualify when they fill out their tax forms,” said IRS Commissioner Doug Shulman. “To get their refunds quicker, the IRS reminds people that the fastest, easiest way is to e-file.”

For the millions of people still filing their taxes the old-fashioned way, office supplies retailer Staples is offering a helping hand and a way to drive traffic into stores. Staples stores are providing customers with up to 30 pages of free copies of their tax forms now through April 15 and free tax advice from tax expert Barbara Weitman online at Staples.com.

Resources

H&R Block Reports Improvement in Tax Season Results Through March 15

IRS Issue 2010 Tax Season Filing Statistics

Staples Offering Great Deals on Software and Free Tax Advice