News Column

H&R Block Anticipates Business from Affordable Care Act

Dec. 6, 2012

Mark Davis, The Kansas City Star

H&R Block Inc. is targeting the nation's health care reform act in the upcoming tax season to boost its tax business in future years.

Block officials talked about the role that tax returns play in the Affordable Care Act, also known as Obamacare, during a Thursday morning conference with analysts in New York.

Enrollment for health care coverage under the government program next fall and subsidies in 2014 for those who can't afford to buy health care will work through tax filings, said Jason Houseworth, president of tax services at the Kansas City-based company.

In 2015, taxpayers who received a subsidy in 2014 may find they owe money or will be due a larger subsidy if their incomes had changed, Houseworth said.

Houseworth said the company will highlight the health care reform law this tax season so customers will see Block as a source of help when the changes take place.

The company is holding the conference to outline its plans for the coming tax season and discuss its recent financial results.

"This is very confusing," Houseworth said to the analysts. "Consumers had the same reaction."

Block said it cut its off-season losses during the company's second quarter by 25 percent on higher revenues.

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 a strong tax season in Australia added to revenues, which grew by 6.2 percent from a year earlier. Revenues totaled $137.3 million in the three months.

Costs were lower as well following the company's job cuts and office closings flowing the U.S. tax season that ended last April.

"The U.S. tax season is right around the corner and we believe we're on pace to deliver significant earnings and margin expansion in fiscal 2013," chief executive and president Bill Cobb said in the company's announcement.

Block said revenues from its tax services grew by $9 million, or 7 percent, to $130 million. The company said it prepared 8 percent more returns in Australlia.

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 ends April 30, 2013.

Distributed by MCT Information Services

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Source: (c) 2012 The Kansas City Star (Kansas City, Mo.)

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