Walmart, two partners offering free tax preparation
Beginning Monday, more than 3,000 Walmarts nationwide began offering free preparation of simple tax forms.
The nation's largest retailer has contracted with H&R Block Inc. and Jackson-Hewitt Tax Service Inc. to set up kiosks inside its stores where customers can have their tax returns completed by trained preparers.
As it is doing in its own retail locations nationwide, H&R Block will offer free preparation of 1040EZ forms at Walmart through Feb. 29. Block will have kiosks in about 250 Walmart stores.
This is the second year Block is offering the service as a way to retain market share by getting people in the door.
Jackson-Hewitt will provide free prep throughout the tax season at about 2,800 Walmarts, up from 2,000 last year. A spokesman said some of its retail outlets may also offer free 1040EZ prep, but doing so is not companywide policy.
About 39 percent of the total 133 million individual returns filed with the Internal Revenue Service last year were submitted before the end of February.
Early filers usually expect a refund. The average refund last year was $2,805, down 2.6 percent from $2,880 in 2010.
Customers who have their taxes prepared at Walmart will have the usual options for receiving a refund, either direct deposit into a bank account or to a prepaid card, or a mailed check.
The IRS has promoted direct deposit in the past few years as a safer, faster alternative. Combined with returns filed electronically, refunds can be delivered in 10 days or less using direct deposit. Checks may take several weeks.
Last year, about 74 percent of refunds were sent via direct deposit.
Walmart, H&R Block and Jackson Hewitt all offer prepaid cards that can be credited with the tax refund at no cost for customers who do not have bank accounts. The cards have some fees associated with using them, although Walmart waives fees for customers who have at least $1,000 loaded onto a card in a given month.
Walmart also provides low-cost check cashing for those customers who receive mailed refunds. The retailer charges $3 to cash checks up to $1,000 and $6 for checks of $1,000 to $7,500.
That's far less than the typical amount charged at a check-cashing outlet, which often takes as much as 3 percent of a check, or $75 for a refund of $2,805.