H&R Block has a definite strategy to getting significant tax returns. The company only markets to clients in certain tax brackets. Tax preparation services tend to be the most profitable when preparers sell them to people in specific socioeconomic brackets. H&R Block has been taking specific steps to exclude low-income potential customers for tax filing.
The company has recently pared down its free tax filing service and changed its online tax preparation packages to make them cost more money for fewer services. More types of tax returns fall into categories that are more expensive at H&R Block compared to some other tax preparers. Preparers have referred to these potential clients as “low-loyalty.”
Consultants have examined these practices and found that H&R Block’s clients fall into four general categories. The category known as the “lower right box” consists of clients whose tax returns require a good deal of paperwork but give little profit potential to the tax preparation company. H&R Block has been actively taking steps to discourage this group of filers from doing business with them.
As a result of the company’s efforts, profits have climbed by 4% during the last fiscal year while the number of prepared at tax returns has fallen by 6.2%. The tax preparers at H&R Block have also had additional time to prepare the returns of higher income clients. The company has also spent 12% less on marketing and advertising. The CEO has expressed that the company has met exact goals with these tactics.
The tax preparation company H&R Block has seen a profit boost of approximately $500 million, but these tactics also represent a risk to H&R Block’s image. By excluding lower earners, the business may not get any clientele from this population segment when they eventually earn more and move into different tax brackets.
When doing your taxes there are so many things to remember that mostly everyone forgets about tax benefits for parents. You could receive benefits for your kids. Here are some ways to see if you apply.
– As of March 29, 2010 you can reduce premiums you paid for health insurance, but that’s only if you were self employed. If your child is under 27 even if they have never been your dependent you can claim them. Meaning if you have a child you have never claimed and he or she is under the age of 27 by December 31, 2010, then you can make them one of your dependents that’s only if you paid premiums on any health insurance, and you were self employed then you can minus the premiums you paid for it.
– If you have ever been laid off work and had to hire someone like a baby sitter or a nursery and daycare center. If your kid is under 13 years of age you might be able to claim them as one of your dependents. Meaning if you got fired and you have a kid under the age of 13 and you had to hire someone to watch them as you look for work, you could claim them as a dependent.
-The EITC is a program where you could benefit from incomes you have earned from farming, wages, and self-employment. Actually it takes down the wage of tax you owe and can possibly give you a refund. Therefor certain people can get rewards for incomes they have earned.
– When you have children and they have income that comes to them by working they possibly can have to file a tax return.
-Interest from student loans. If you have a kid that is in college and you pay qualified student loans you can reduce the interest you paid.
Before doing your taxes remember to check up on things and make sure if you have kids to research all the benefits available to you. Your tax return will benefit greatly from your knowledge of child tax credits.