Last week, Walmart announced it would offer free tax preparation services from H&R Block and Jackson Hewitt in its stores nationwide.
But before you rejoice, know there's a catch: Both companies are only offering these services for taxpayers filing out the 1040EZ, a basic, one-page form for single or married individuals who have no dependents and earn less than $100,000 per year.
All they need to participate is their W2.
Unfortunately, the rest of us —a.k.a., homeowners, freelancers, business owners and parents — do not fall into this category.
Kay Bell. contributing editor at Bankrate.com thinks the service could be a good thing, but says to make sure you need it.
"If it's easier for people to get to Walmart than (a tax preparer) in their community, that's a good thing," she says. "But obviously, you want to be cognizant of upsellings."
For example, some taxpayers may be asked to file an income tax return with their state, a service that could incur additional costs.
Neil Johnson, a CPA at The Dolins Group. is less convinced that Walmart's deal is so great for consumers.
"This situation only benefits Walmart," he says.
Think about it: A consumer walks in, gets her taxes done
and receives her refund, either immediately, with a refund anticipation loan (if it applies), or the promise of a direct deposit within a week's time. The first thing she'll want to do at the large discount store? Spend, spend, spend.
"It's more of a psychological effect," he says.
Johnson is less impressed by the "refund-driven" advertising tactics promoted by tax preparation companies. So if all you need to do this tax season is fill out a 1040EZ form, do it yourself, he advises.
"Anybody can do it. The people that are going to take advantage of this service are the people who may just have some anxiety about doing their own taxes," he says.
And with Internet access, there's no excuse. The IRS offers a free e-file program on its website for people who make less than $57,000 per year.
A Walmart spokesperson said the company has provided tax preparation and filing services for several years, and that this year it added about 800 Jackson Hewitt kiosks in its stores nationwide. The store does not have information on how many customers shop in the store using their tax refund.
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