Poll: More Consumers Going the DIY Route for Taxes
Black Enterprise Magazine September/October 2018 Issue

NEWS_PollOption4It’s tax-filing season, and whether taxes are done in January or at midnight on April 15, the question isn’t “Will you file your taxes?” but rather “Who will do them for you?”

When BlackEnterprise.com recently polled readers about who will prepare their taxes this year, a majority of respondents said they would self-prepare.

“I think in some cases people just want to save some money, and they are giving it a try themselves,” says Rolando Palacios, director of tax services at the Center for Economic Progress. That may be the case considering that the average tax preparation fee can range from $129 to $229 for the federal 1040 and a state tax return, depending on whether or not deductions are itemized.

More than 132 million tax returns were filed by April 24, 2009, and 31.2 million returns were filed electronically by home computers, according to the IRS. E-filing, which allows taxpayers to electronically file returns using IRS approved tax preparation software from any internet ready computer, increased 19.3% since the 2008 filing season. E-filing is cheaper for the IRS, and it is safer for the taxpayer because it reduces errors, according to an IRS spokesperson.

Increased availability to free electronic tax software might have something to do with the increase in self-prepared returns. Taxpayers with adjusted gross incomes of up to $57,000 can use the IRS’s standard Free File options this year, which equals about 70% of all taxpayers.

Thirty-one percent of BlackEnterprise.com respondents said they are going to hire a certified public accountant to prepare their taxes, 6.3% plan to have a friend or relative do their taxes, and 8.3% chose “other.”

Even still, preparing taxes on your own isn’t easy. Due to the American Recovery and Reinvestment Act there are an abundance of new tax credits, refunds, and deductions which will make doing taxes more difficult. They range from credits for parents of college students and new car buyers to first-time homebuyers and green credits for homeowners that remodeled their houses with eco-friendly building materials and appliances.

“I think it is challenging for somebody who isn’t a professional to do their own taxes; even someone who is well educated and think they know what they are doing,” says Palacios.

About 13% of respondents to the poll said they planned to visit store-front tax preparation businesses like H &R Block or Jackson Hewitt. Many low-income consumers turn to them because they are conveniently located and because the refunds are immediate, says Chris Long, a certified financial planner and president of Chicago-based Long & Associates LLC. Yet, he says people should shy away from refund anticipation loans at these places, because you have to agree to pay them from your refund causing you to owe them a fee plus interest, if you don’t receive a refund.

“The loan is appealing to a lot of people because they might have bills to pay or unemployment in their household and they are really counting on this money [immediately],” he says. Fortunately, with Free File and through programs like the Volunteer Income Tax Assistance program that offer free tax preparation, there is no need for the majority of taxpayers to patronize their services.

The results are in:

Who will prepare your taxes this year?
–Me 41.7%
–A certified public accountant 31.3%
–H&R Block or other storefront tax preparer 12.5%
–Other 8.3%
–A friend/relative 6.3%

BlackEnterprise.com conducted the poll between Feb. 8 and Feb. 22.

RESOURCES:

National Society of Accountants
The American Institute of Certified Public Accountants
The Tax Assistance Program

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.


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