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More People Tackling Taxes Solo To Save Money

Tax Preparers Report Drop In Customers

POSTED: 5:10 pm EDT March 22, 2010
UPDATED: 6:43 pm EDT March 22, 2010

With the economy still on shaky ground, more people are opting to do their own taxes this year in an effort to save money, experts said.

Turbo Tax, the leading manufacturer of tax software, reports its sales have jumped 10 percent from the same time last year, while tax preparers H&R Block and Jackson Hewitt have both seen a drop in business.

Do-it-yourself software generally runs from $20 to $70, compared to $200 for the average professional tax preparation, 6News' Kara Kenney reported.

"(Saving money) was a huge factor for me," said Jennifer Cunningham, of Indianapolis, who did her taxes on her own for the first time this year.

While the initial cost may be less, tax preparers warn that tackling your own taxes may not be the best way to save money in the long run.

"It's pretty much a do it yourself society anymore," said Robyn McMahon, a tax preparer with H&R Block. "People may be very computer savvy, but the problem is, they're not tax savvy."

She said many people are confused about new tax credits, including those for homebuyers, energy efficient savings and the Making Work Pay incentive.

"The Making Work Pay credit is another tax goody, up to $800 for a married couple that are both working," McMahon said.

She said other mistakes include forgetting about interests and dividends and keeping poor records.

"People sometimes become overly optimistic about how much they gave away. They're claiming deductions without receipts," McMahon said. "Seventy-five to 80 percent of returns have some kind of error on them, and that's a function of how complex our tax code is."

But Bill Thomas, president of the Better Business Bureau of Central Indiana, said using a tax preparer comes with risk as well.

"I think there are new companies, not necessarily scams, but you have to be careful as an individual if you're going to sign up with somebody who may not be here past the season," he said.

Cunningham took her forms to the IRS to make sure she prepared them accurately.

"I just wanted to check it before I send it," she said. "I was right, it was accurate and I'm so happy."
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