The mid-term congressional election is less than two months away and some observers wonder whether the event will be all about nothing.
Dec. 07--H&R Block Inc. will emphasize changes under the Affordable Care Act this tax season to boost its business in future years.
Block officials talked about the role that tax returns play in the health care law, also known as Obamacare, during a Thursday morning conference with analysts in New York.
For example, the W-2 forms that companies are getting ready to send employees will indicate whether the individual has health coverage at work and, therefore, will meet the coming requirements of the act. Block sees that as an opening during tax talks with customers this season to bring up the many changes ahead.
One message will be that the tax returns Block helps customers file in the next few months will include much of the information about income and dependents some of those customers will need next fall, should they not be covered through their work, to enroll in health coverage programs on government-run insurance exchanges.
Government subsidies for customers who can't afford coverage, and penalties for those who don't get coverage, also will play out on their future tax forms, according to Block.
In early 2015, as taxpayers ready their 2014 tax returns, some will find out that they owe money or will be due a larger subsidy if their incomes have changed, said Jason Houseworth, president of Block's U.S. tax business.
"This is very confusing," Houseworth said. "Consumers had the same reaction."
Complexity at tax time is likely to mean more business for preparers, and Block is the nation's largest.
"As you go forward, there would be potential," said Joe Janssen, an analyst at Barrington Research in Chicago. "It's building that relationship with the customers."
The company outlined its plans for the coming tax season during an annual conference call with analysts. It also released its second quarter financial results.
Chief executive Bill Cobb said Block was focused on increasing its contact and work with customers year-round, not just at tax time. The attention to the health care changes falls into that category, as will a campaign to increase use of Block's prepaid debit cards, which it calls Emerald Cards.
Cobb also emphasized Block's plans to increase its tax business overseas.
It recently wrapped up its tax season in Australia, and growth there boosted results for the second quarter.
The company said it prepared 8 percent more returns in Australia.
Block said it cut its off-season losses during the quarter by 25 percent. Shares of H&R Block jumped 3.9 percent on the day, gaining 69 cents and closing at $18.26.
The nation's largest tax preparer said it lost $105.2 million, or 39 cents a share, during August, September and October. A year ago, its losses reached $141.7 million, or 47 cents a share, in the quarter.
Block said revenues grew by 6.2 percent from a year earlier and totaled $137.3 million in the three months.
Block said revenues from its tax services grew by $9 million, or 7 percent, to $130 million.
The announcement said the company "remains on pace" to report pre-tax savings of between $85 million and $100 million for its fiscal year, which will end April 30, 2013.
To reach Mark Davis, call 816-234-4879 or send email to [email protected].
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