If you watch TV, chances are you’ve seen the new H&R Block commercials for this tax season.
As a small Utah CPA firm, I covet H&R Block’s marketing budget. In my opinion, its marketing messages have been pretty compelling. But therein lies the problem with its marketing. Compelling doesn’t mean truthful or accurate.
Starting with the fine print on the commercial, I feel H&R Block’s statement is misleading.
“In a study of self-prepared tax returns, H&R Block tax pros found more money for about 1 in 5 people.”
A self-prepared tax return is where the taxpayer prepares their own return. Is this different than someone using a tax software like TurboTax or H&R Block’s TaxCut? Those are technically self-prepared. My question is, “Were those self-prepared returns on H&R Block’s own tax software?” or “Were those self-prepared returns filled out on paper forms?” (I can tell you from our experience that 100% of returns we’ve reviewed that were filled out by hand were wrong.)
H&R Block tax pros found 1 in 5 missed out on more money. Would Incite Tax Pros find the same thing or more than 1 in 5? We don’t have confidence in the overall competency of H&R Block tax pros. If we did, we would hire them to work for us. After all, we are actively engaged in tax work all year and not just during tax season like most H&R Block tax pros. I think we would find more errors than they did.
1 in 5 people. How many returns did they review? It must be a ton to come up with the statement that America is leaving a billion dollars on the table. It turns out it was 1,200 returns. That means that out of 1,200 returns, they found 240 returns that left money on the table. There are apparently around 56 million Americans who will do their taxes on their own this year. So H&R Block took a sample size of two ten-thousandths. I’m not sure my statistics professor would agree that is a large enough sample size. It wouldn’t be that big of a deal for me if they didn’t extrapolate that what they found relates to the other 55,998,800 self-preparers out there.
What this also means is that 4 in 5 people, H&R Block couldn’t help. Some people may not realize that there are some tax situations that a tax professional can’t do more for you than you can do for yourself. If you get w-2s and mortgage interest and have a minimum level of competency with tax software, a TurboTax type of product will suit you just fine.
If you fall into that situation, the only reason you would want to use a tax professional like Incite Tax is because we can have you in and out with a filed tax return in a half hour and it may take you longer on your own. We charge around $125 for a simple return like that.
GET YOUR BILLIONS BACK AMERICA! I actually agree completely with this statement.
I don’t need a crappy study with an even crappier interpretation to figure this out. I haven’t come across a business owner that we haven’t been able to help them save at least $2,000 in taxes. (Don’t take that as a guarantee though.) If I were to turn that into a study and use it for marketing, assuming there are about 10 million small businesses in America, I would say that American’s are leaving $20 billion on the table every year. Because we are responsible people though, we wouldn’t make that claim.
Don’t fall for misleading commercials. Contact a real tax professional about your situation to see if you really are leaving money on the table. Most firms, including Incite Tax, offer a free consultation.