Waiting to File Taxes? You Might End Up Paying More
By Karla Bowsher
Filing your tax return late in the season doesn't just add to your stress level. It can also add to your filing costs.
Some do-it-yourself tax-filing software companies charge procrastinators higher rates, a practice known as "price surging." Bloomberg Business reports that they include TurboTax, H&R Block and TaxAct.
The publication explains:
They offer cheap, sometimes even free services to early filers. Then, usually in late March, they slap customers with price hikes of 30 percent or more. Sometimes they continue ratcheting prices up in the days before the deadline.
Even free filing options aimed at taxpayers with the simplest of tax situations dry up toward the end of the tax season.
For example, TurboTax ended its "Absolute Zero" offer in mid-February last year, according to Bloomberg. This free service is for taxpayers who can file using the simple tax forms 1040EZ or 1040A and meet other criteria.
A spokesperson for TurboTax's parent company, Intuit, tells Bloomberg that charging lower prices earlier in the tax season encourages taxpayers to file as early as possible, which helps the company ensure it can provide good service during the busiest parts of the season.
This year, though, TurboTax was still advertising its Absolute Zero service on its website home page as of this morning.
TaxAct, which has matched its competitor's offer of a no-cost federal and state filing option, was also still advertising the service on its website homepage as of today. (Please note that our link to TaxAct is an affiliate link. That means that we may get a commission if you decide to purchase anything from TaxAct.)
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Additionally, TaxAct offers what it calls a "Price Lock Guarantee" that allows procrastinators to lock in early-season prices and still file later on. Here's how the company describes it:
We guarantee that if you complete your return using any of our online products, you will pay the product price listed for that product at the time you started your return.
If we charge you more than the price listed at the time you started your return, we will reimburse you for the difference.
H&R Block did not respond to Bloomberg's requests for comment on its online price strategy, according to the publication.
To learn more about how to keep as much money in your pocket as possible when filing with Uncle Sam this year, be sure to check out Money Talks News' new course taught by Stacy Johnson: "Mastering Taxes: Slash Your Taxes and Have Fun Doing It!" (Readers can save 28 percent via that link.)
How do you avoid added stress and costs when filing taxes? Let us know what works for you below or on Facebook.