H And R Block Troubles Presents Investor Opportunities

In just the last month, H and R Block shares dropped a whopping 21% following an unsatisfactory third quarter that led to investors fleeing to save themselves. On the other hand, it is believed that the fourth quarter could turn everything around and H and R Block stock can provide incredible investment opportunities for investors with a keen eye.

While the third quarter generally performs lower than other quarters every year, this year's loss was much more than ever anticipated. Its revenue dropped below the expected $502 million to approximately $475 million. That is a $79 million loss, which is far greater than the $37 million loss in 2015, during the same quarter. If that's not enough, the company also demonstrated four consecutive years of decreased volume, which worried its stockholders.

So the question is, is this an income opportunity for a savvy investor? We believe it may be. As disposable income increases this tax season, the public feels there is less urgency to complete their tax returns early. As a result, the possibility remains that the fourth-quarter earnings may be much higher than expected. The potential that exists for greater than anticipated earnings makes H and R Block stock attractive in this particular quarter.

Lower Than Expected H&R Block Earnings

Taxpayers aren't rushing to file their taxes early this year, and it's impacting H&R Block earnings.  It was announced that the company had huge fourth quarter losses because taxpayers are waiting later to file taxes.  H&R Block earnings are lower in other countries too.

Usually, H&R Block has losses for quarters that are outside of the regular season.  But the most recent losses were higher during the tax season, and this isn't what Wall Street anticipated.  Thus, the company shares dropped by 5.1 percent, which resulted $31.22 per share.  This is 2.5 percent lower than last year.  H&R Blocks also reported that they had 6 percent fewer U.S. tax returns during the first three quarters of  the year.

According to H&R Block, these loses were attributed to ongoing fraud and late tax filing.  When taxpayers file late, it takes longer for the company to process their returns.  The company also stated that the federal government as well as state governments were trying to find a way to combat growing instances of tax fraud.  Hopefully, this will result in changes within the tax industry.

H&R Block earnings had a loss of $81.7 million for the quarter.  This is equivalent to 35 cents per share.  The loss was just $36.9 million during the previous year.  This equates to 34 cents a share, and sales went up by 6.8 percent to $475 million.

I Cannot Pay My Taxes, HELP!

English: Debit Card (Photo credit: Wikipedia)

About 27% of taxpayers annually need to pay the IRS when they file their tax returns. If you are one of these individuals, you need to figure out how you are going to pay. When you have the amount needed, you can use a debit card, mail a check with your return, or have the funds withdrawn from a savings account.

If you cannot pay the amount, then you can use a credit card or setup a payment plan with the IRS. Pay as much as you can by the tax deadline and wait for the IRS to tell you how much a month additional you should pay. An Online Payment Payment Agreement will give you up to 120 days to pay off the balance. Find this form on the IRS website, IRS.gov.

IRS Form 9465 gives you more than 120 days to pay the IRS for the taxes you owe. This is considered an installment agreement and is available with the major tax preparation software packages including TurboTax. There is a small fee to setup the installment agreement but if this is your only choice, it is the way to go.

Consider all the costs involved when deciding how to pay your taxes when you file your 2014 tax return. If the APR on a credit card is high, then going directly to the IRS could be your best plan of action. Just make sure that you have everything setup prior to the filing deadline or you could face additional fees and penalties, making your debt burden even bigger.

Related articles

• Prepaid Debt Cards And IRS Tax Debt
• File Early With Free TurboTax Online