Economy's effect on tax filing methods

The struggling economy apparently is affecting tax filing. And I'm not just talking about individuals having trouble paying what they owe Uncle Sam or their state tax collectors.

The actual business of filing seems to be sensitive to these tough fiscal circumstances, with it looking like hard times help one tax-related sector, but hurt another.

Last week, a market analyst with Oppenheimer told his clients that in this soft economy, worried consumers have looked for ways to trim costs, including  preparing their taxes themselves instead of paying a fee to have someone do it for them.

The evidence of such a shift?

Intuit's latest report on its TurboTax product showed growth for the software of more than 11 percent compared with a year ago.

Meanwhile, Kansas City-based H&R Block announced that its preliminary tax season numbers ending Feb. 15 showed same-office tax returns prepared in retail operations dropped 5.6 percent from the same period in 2009. Block's total number of tax returns prepared dropped 6.3 percent year-over-year.

So do these two company earnings reports really mean that folks are truly trading paid tax preparers for self-preparation options?

It will take more than one set of numbers to reach a solid conclusion. In fact, just a few weeks ago a survey found that more folks are turning to tax pros for tax help.

But these latest Wall Street figures do indicate a trend worth watching by taxpayers, tax preparers and investors with shares in tax sector businesses.

Take our poll: The early tax-filing filing pattern reports raise, as usual, even more questions.

Is the IRS' own Free File program contributing to this trend? 

As the April 15 filing deadline gets closer will folks who've been putting off their taxes decide they need personal tax pro help?

While decidedly unscientific, let's see if Don't Mess With Taxes readers can add some more fuel to the filing method fire via this short poll:

How do you file your taxes?

Download tax preparation software onto my own computer. Use an online tax software preparation program. Head to the IRS Free File site. Turn everything over to a paid tax preparer. Bug my accountant cousin until she agrees to help me file! I'll worry about it in October.

Related posts:

• E-filing 2010 is here ... except for homebuyer credit claimants
• Picking a tax pro
• New forms this filing season
• 7 new tax laws that could save you money
• Don't forget your Daily Tax Tip!
• Don't forget your state taxes!

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