The down economy is hurting yet another industry: tax preparers.
A number of independent tax services and accountants, as well as national firms such as H&R Block and Jackson Hewitt, report that business is flat or down from last year.
The culprits? The growing popularity of tax software, fewer refund anticipation loans, an abundance of free help and high unemployment.
Christopher Barry is among the new breed of do-it-yourselfers. In past years, the 39-year-old physician assistant paid an accountant $500 or so to prepare the joint federal and state income tax returns for him and his wife, Ashley, a research scientist. But in January, he paid about $40 for TurboTax software.
"I really didn't get a lot of added value from having someone prepare my taxes," said Barry, who lives in Morrisville. "They prepared my taxes and really didn't make a whole lot of recommendations in terms of ways to save money."
Many more Barrys are out there.
Industry leader H&R Block reported last week that the number of returns prepared by its retail outlets was down 9.4 percent through Feb. 28, in part because of the shift to do-it-yourself returns. CEO Russ Smyth also told analysts that heavy snowfalls and high unemployment also hurt.
On Thursday, Jackson Hewitt Tax Service estimated that its returns will decline 17 percent to 19 percent this season.
The number of people who are unemployed - a record 11.1 percent in North Carolina in January - is hurting the eight Jackson Hewitt franchises across the state owned by Lacy Tinnen.
"I think many of the folks whose only source of income is unemployment [benefits] are simply not filing - whether they are required to or not," said Tinnen, who has offices in Raleigh and Mebane.
The number of returns prepared by Tinnen's offices is down about 10 percent this year.
The cost of the 1040
The cost of tax preparation depends on whom you go to and the complexity of your return. The latest survey of 8,000 preparers by the National Society of Accountants reported that the average fee for a Form 1040 with itemized deductions, plus a state return, was $229; the average without itemized deductions was $129.
Some services are offering discounts. Jackson Hewitt, for example, has $25-off coupons. A Lady Liberty lookalike has been handing out discount coupons for Liberty Tax Service franchises whenever business slows. H&R Block offers a "Best of Both" bundle: Do your taxes online and have them reviewed by an H&R Block professional for $79.95.
After seeing his tax business slide 10 percent last year, Cary accountant W. Marc Gilfillan offered his customersG-Bucks - a coupon worth $100 that resembles a hundred-dollar bill but features Gilfillan's smiling visage superimposed over Benjamin Franklin's.
"That's an ugly Ben Franklin," said Gilfillan, who is also giving G-Bucks to customers who bring in new clients.
To be sure, there are still plenty of people whose returns are so complicated they require a professional. There are also those who'd rather not spend their time filling out forms. The Internal Revenue Service estimates that it takes the average taxpayer 6.2 hours to complete and submit a Form 1040.
"$75 and they take care of it for me," said Carmelo Pacheco, 49, of Apex, who was laid off from his job as a truck driver in July.
Pacheco added that he could probably figure out how to prepare his returns, but why bother? "It's something I don't have to do," he said.
Similarly, Mike Rhodes of Garner, who was laid off 13 months ago after 18 years as a distribution manager, continues to go to the same tax service he has gone to for 35 years.
This year Rhodes, 55, experimented with a free tax software program available over the Internet, but didn't like the results. So he went to his tax preparer, who boosted his federal refund by $400 and got him a $200 state refund.
Not all are hurting
Some certified public accountants say the ailing economy actually helps them.
"Over the 26 years we've been in business, the thing I have noticed with recessions is that they tend to be very good years for us," said David W. Harris, whose CPA business in Cary bears his name. "I guess it is people being more concerned about their money, wanting to make sure they're taking advantage of everything they can."
Brandon Britt, who owns seven Liberty Tax Service franchises in central and eastern North Carolina, reported that returns at his locations are up 3 percent this year. As in past years, Britt offers discount coupons when traffic slackens and then turns off the spigot when it gets busier.
His franchises also offer a "free double-check" of returns that people prepare with software such as TurboTax. The aim is to give people a free taste of their service with an eye toward making them customers.
"Their situation may change next year," said Britt. "They may buy a house. They may get married. They may have another child. ... If we do the right thing for them, we're going to get them back."
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The last thing you want to do if you're unemployed is not file a tax return.
If your income is substantially less, you may be eligible for credits, including the Earned Income Tax Credit.
If you're worried that you can't pay taxes you owe because you lost your job, file your return and chat with the IRS.
The agency is continuing the kinder, gentler trend it introduced last year when it gave employees flexibility to help people who are having trouble paying because of the economic crisis.
This year the agency is holding 1,000 open houses on Saturdays. Individuals and small business owners will be able to get help from IRS personnel. Bring all your information and you should be able to walk out with the issue resolved in most cases. The first open house is March 27. Check http:// www.irs.gov www.irs.gov for dates, times and locations.
You can also make get help at your local office by just walking in.
In Durham, the office is at 3308 Chapel Hill Blvd. Call 401-0300.
In Raleigh, go to 4405 Bland Road. Call 850-1100.
Both offices are open Monday through Friday from 8:30 a.m. to 4:30 p.m.
The IRS also has a page on its Web site that links to other resources and information. From the home page, go to "Tax Center to Assist Unemployed Taxpayers."
You may also qualify to have your taxes done for you for free.
IRS-trained members of the AARP will provide tax preparation services for those 50 or older at various sites. To find one nearby, call 888-227-7669.
Members of the military and those whose income is $49,000 or less can get returns done via the Volunteer Income Tax Assistance Program. VITA sites are usually in community centers, libraries and the like. To find one nearby call 800-906-9887.
If you make $57,000 or less you can use free tax software at www.irs.gov/freefile www.irs.gov/freefile. Click on the "free file" link to get a list of participating companies.
Staff writer Mary Cornatzer
