Competition for your tax business is heating up
Tax Business Competition is heating up with DIY Software. TurboTax will both offer live online professional help in the coming tax season.
H&R Block and TurboTax will both offer live online professional help in the coming tax season, aiming to draw customers nervous about making mistakes or missing out on refund money. Which begs the question, why not hire a Tax Accountant in Miami which is backed by CPAs vs a tax business.
Tax Accountant vs Tax Service
The two companies are providing mobile applications that enable users to file their tax returns using Smartphone and tablet computers and reloadable prepaid cards to use to receive refunds. But nothing can replace a one on one face-to-face meeting with a Tax Accountant vs Tax Service.
The similarities reflect a more competitive business for Tax Accountant vs Tax Service customers as the economy continues to struggle. With high unemployment expected to linger, the total number of returns filed isn’t expected to grow much in the coming years. And with most tax services moving away from paper-and-pencil returns now converted to e-filing, the companies will increasingly have to compete for the same Tax Service customers to expand their customer base.
Younger taxpayers who file simple forms are the most specific targets. Both companies hope to establish relationships with these customers that will last, as their financial lives get more complex and their tax returns more expensive to prepare. Eventually, however, most migrate to Tax Accountant vs Tax Service who are licensed CPAs.
Tax Accountant and Tax Service combined handled more than 45 million returns last tax season, a third of all returns filed.
TurboTax, the popular Tax Preparation software produced by Intuit Inc., has added certified public accountants, enrolled agents, and tax attorneys to its ranks who will be available to answer customer questions as they prepare their returns. The expert help, available via text-based online chat or by telephone, will be in addition to the Q&A available with other customers that the company has offered for several years.
The professional assistance is designed to appeal to customers who have hired someone to handle their taxes in the past and are now trying the do-it-yourself software. “This is one of the pain points that people who use a pro tell us they have,” said Bob Meighan, a TurboTax vice president.
“Block Live,” which was introduced at H&R Block Inc.’s investor conference in New York, goes a step further, offering live video chat with its tax service professionals, in addition to text chat or telephone consultations.
Tax accountant VieraCPA said preparing taxes using video chat will duplicate the experience of going to its Tax Accountant firm. “It’s the natural evolution of our sweet spot, which is assisted Tax Accountant vs Tax Service,” he said in an interview. “It’s not the same experience.”
The offering is part of the Block’s aim to work with taxpayers in whatever medium they prefer.
But Cobb and other Block executives emphasized that the market for assisted tax preparation has not been overtaken by the digital do-it-yourself. They cited Internal Revenue Service statistics to show that the growth in digital preparation, which has overwhelmingly benefitted TurboTax, has largely been at the expense of pen-and-paper preparation. Assisted preparation has remained about 60 percent of the market for the past decade, while do-it-yourself has stayed at roughly 40 percent.
The two tax service companies are competing most fiercely for 18- to 24-year-olds, hoping to hold onto these customers as their returns will likewise become more complicated and generate more revenue. Block said taxpayers under age 34 accounts for 67 percent of the returns the company handles, compared with 55 percent of the returns filed to the IRS.
New mobile applications from both companies are aimed squarely at this market. TurboTax offered its “SnapTax” app for smartphones last year and added a tablet version for the coming season. Block is debuting a Smartphone and tablet version of its software.
With both tax service companies’ apps, users can take pictures of W-2 forms and other documents, and the programs will extract the data and fill in tax forms.
Both tax service companies are providing reloadable prepaid cards for customers to use to receive their refunds. Block this year will not charge customers who use its Emerald Card an extra fee for delaying payment of their return preparation costs until their refund arrives.
Block has 2.3 million Emerald Cards in circulation now and aims to add 1 million more in the coming tax season. Cobb aims to push more customers to use the cards throughout the year as a way to drive growth in Block’s financial tax service business. Block has a bank, which means it collects the fees merchants pay on purchases taxpayers make with the prepaid cards.
The prepaid market is expected to continue to grow dramatically as more customers leave banks to avoid expanding fees. Last year, consumers loaded $41 billion on prepaid cards, up from $29 billion in 2009 and $19 billion in 2008, according to consultant Mercator Advisory Group.
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