Taxpayers Expect Refunds, Will Save or Invest, According to Microsoft and H&R Block Surveys

REDMOND, Wash., Feb. 2, 2005 — As W-2 forms arrive in mailboxes and people begin preparing their 2004 tax returns, findings of recent surveys by Microsoft Corp. and H & R Block indicate the majority of respondents are expecting refunds this year, and many of them intend to use those funds to save, invest or pay off debt.1

Although saving or investing refunds ranked highest on the list of priorities for almost 43 percent of people expecting refunds, paying down debt followed closely behind with 35 percent. A large number of survey respondents (33 percent) indicated that the most confusing part of preparing their tax returns is understanding the latest tax law changes. In addition, 49 percent of respondents said it takes them an average of one to five hours to complete the process; 6 percent said they spend more than 20 hours on their tax returns. Among married respondents, most (52 percent) say one person handles the entire process, rather than dividing the duties or hiring a third party. These Microsoft survey findings were supported by a separate H & R Block survey of 2004 taxpayers.

Digital Solutions Inform Consumers and Simplify Tax Returns

Digital tax solutions such as H & R Block’s TaxCut software and its online tax products at and have become increasingly popular as new technologies enable consumers to prepare and file their returns more quickly and easily. Together, Microsoft and H & R Block offer easy-to-use digital tax solutions including tools, commentary and calculators that help taxpayers plan ahead, understand complicated issues, including tax law changes, and determine how to make their refund work for them. Because Microsoft®
Money 2005 brings all financial information together in one place, consumers can easily transfer required tax data into H & R Block TaxCut, reducing the time and energy required to file their return.

“Each year, the tax system grows increasingly complicated, causing people to seek reliable and straightforward solutions to help them get through the stresses of tax filing,” said Jeff Schnepper, renowned tax attorney, best-selling author and Microsoft Money tax expert. “With new and experienced filers alike searching for a no-pain way to prepare their taxes, resources such as Microsoft Money can help them get their finances in order for a less ‘taxing’ experience.”

Features and Tools Address Tax-Time Concerns

  • An easier way to gather all necessary financial information. With Microsoft Money, consumers can see all their financial information (e.g., income, federal and state taxes paid, IRA contributions and home mortgage interest) in one place and then easily export that information to H & R Block TaxCut.

  • Helpful, simple direction. Microsoft Money 2005 Deluxe, Microsoft Money 2005 Premium and Microsoft Money 2005 Small Business help consumers tackle taxes throughout the year with easy-to-use tools such as the Tax Estimator and Deduction Finder, and tax-related reports and charts that simplify the filing process and maximize tax-savings opportunities.

  • A quick and easy filing solution. By preparing and filing electronically with H & R Block TaxCut, taxpayers have the flexibility to work on their taxes when and where it is most convenient. And for a limited time, consumers who purchase a qualifying TaxCut product and Microsoft Money will receive a $40 mail-in rebate2 on their purchase of Money 2005 Deluxe, Premium or Small Business (making the price of Microsoft Money $19.95, $39.95 and $49.95, respectively).

  • Expert tips and guidance. To help taxpayers avoid a frustrating search for tax help, Microsoft Money provides useful tools and insightful commentary from Schnepper. Topics such as “Cut Your Tax Bill Now” and “Avoid an Audit” help consumers understand tax-related issues and how they might affect them personally.

“Preparing taxes with a digital solution such as TaxCut enables consumers to file from the comfort of their own home and instantly access a tax professional or insight into credits or deductions they could otherwise miss,” said Derek Swords, director of software products for H & R Block. “And as more people realize the benefits of using a digital solution such as TaxCut, including a faster refund and less chance of error, their computer can be the best place to start, prepare and complete their returns.”

About the Microsoft Home Retail Division

The Microsoft Home Retail Division (HRD) is a leading publisher of home software for the PC. Celebrating Microsoft’s 20 years of delivering products that help consumers accomplish and enjoy everyday tasks, HRD brings consumers Microsoft Encarta® , the industry’s best-selling encyclopedia brand;3 Microsoft Digital Image products, which combine advanced photo-editing features and unmatched organizational tools with unparalleled ease of use; Microsoft Money, easy-to-use personal finance management software; Streets & Trips, Microsoft’s all-in-one mapping solution with points of interest, routes, driving directions and Pocket PC compatibility in one value-priced software package; and Microsoft Works Suite, the best-selling4 integrated home productivity software that offers six of the latest essential home software titles in one package for tremendous value. Used with the MSN®
network of Internet services, these products have a unique depth and mobility that allow consumers to take their PC experience even further. More information about the Home Retail Division product lineup is available at .

About H & R Block

H & R Block Inc. ( ) is a diversified company with subsidiaries that deliver tax services and financial advice, investment and mortgage services, and business accounting and consulting services. H & R Block empowers clients to make tax and financial decisions by providing a unique combination of tax services, financial information and advice, and related products and services. The company’s mission is to help clients achieve their tax and financial objectives by serving as their tax and financial partner.

As the world’s largest tax services company, in 2004 H & R Block served more than 21 million clients in the U.S. and 12 countries. H & R Block Financial Advisors Inc. offers investment services and securities products. With approximately 1,000 financial advisors serving clients at approximately 360 branch offices, H & R Block Financial Advisors Inc. is a member NYSE, SIPC, a registered broker-dealer and investment advisor. H & R Block Inc. is not a registered broker-dealer and is not a registered investment advisor. H & R Block Mortgage Corp. offers a full range of retail mortgage services. Option One Mortgage Corp. provides mortgage services and offers wholesale mortgages through large financial institutions and a network of 24,000 independent mortgage brokers. RSM McGladrey Business Services Inc. and its subsidiaries serve mid-sized businesses and their owners with tax, accounting and business consulting services, as well as personal wealth management services.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

1 December 2004–January 2005 surveys by Microsoft and H & R Block: more than 2,500 respondents from CNBC on MSN Money and

2 See TaxCut package for free Money offer details; see Money 2005 package for $40 rebate offer details. Certain offer restrictions apply.

3 The NPD Group/NPD Techworld®
, March 1993–July 2004. Based on total U.S. retail sales.

4 The NPD Group/NPD Techworld, March 1993–December 2004. Based on total U.S. retail sales.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at .

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