Press Release Details

KANSAS CITY, Mo.--(BUSINESS WIRE)--March 21, 2005--H&R Block (NYSE: HRB) is reminding taxpayers that there's still time to take advantage of key tax tips in order to save money this year. By focusing on the tax code's details -- including deductions that are new or set to expire -- taxpayers at all income levels can reap potentially big financial savings.

Here's H&R Block's rundown of the top 10 tips that can help you keep more cash on April 15:

    --  Sales Tax Deduction: New for this year, taxpayers who paid
        more in state and local sales tax than they did in state
        income tax in 2004 can choose to deduct the sales tax instead
        of the state income tax. That's a big win for taxpayers living
        in the eight states without state income tax. It's also a
        bonus for those who purchased certain big-ticket items -- such
        as an automobile, boat or home building supplies -- so track
        down those receipts and start crunching numbers. The Internal
        Revenue Service website (irs.gov) provides tables that can
        help you calculate whether it makes more sense to deduct your
        state income tax or sales tax, even if you didn't keep all
        your receipts. The deduction will also be in effect through
        tax year 2005, so it might be a good time to start keeping
        receipts and to trade in those wheels for something new!

    --  SUV Purchase: If you're one of millions of Americans who
        purchased a sports utility vehicle (or any vehicle over 6,000
        pounds) before October 23, 2004, and you use it at least half
        the time solely for business purposes, you can write-off as
        much as $102,000 on your 2004 return. But be advised: this
        deduction is limited to $25,000 for vehicles over 6,000 pounds
        that were placed in service after October 22, 2004.

    --  AMT: Those who've been walloped in the past with the dreaded
        alternative minimum tax (AMT) because they exercised stock
        options can get a credit for the additional tax if and when
        they sell the stock. However, this credit can only be claimed
        in a year when the individual is not subject to the AMT. Sound
        complicated? Nothing is easy when it comes to AMT, however,
        seeing a tax professional will help with how to handle AMT now
        and in the future. Or, if you believe you might be subject to
        AMT, check out the AMT Estimator calculator on
        www.hrblock.com.

    --  Refinancing: Unlike an original mortgage, you can't write off
        all the points paid in connection with refinancing in a single
        year. But you can amortize the expense by dividing the dollar
        amount of the points paid by the number of years in your
        mortgage, then deducting that amount annually until you own
        the property. If you sell your home before you've repaid the
        mortgage, you can write off all the remaining unamortized
        points cost.

    --  Home Equity Loans: Regardless of what the money is used for,
        you can deduct all the interest on a home-equity loan of up to
        $100,000. But when figuring the AMT, you can claim a deduction
        only for loans used for home improvement.

    --  Stock for College: When it comes to financing your child's
        college education, don't sell stock to pay for it. A far
        better route is to give your child the stock and then have
        them sell it. He or she will be taxed at just 5 percent versus
        the 15 percent you're likely to pay. But there is one catch:
        You must have owned the stock for more than one year. Keep in
        mind that both you and your spouse can gift as much as $11,000
        each per year to your child tax-free. After that, you should
        pay the balance of the child's educational expenses directly
        to the school.

    --  Worthless Investments: If you own stock or bonds in a company
        that has stopped doing business and has no intention of
        restarting operations, (merely filing for Chapter 11 doesn't
        necessarily render an investment worthless) you can deduct
        your cost basis in the stock or bond. If, however, you owned
        the investment in a tax-deferred account like an IRA or
        401(k), the loss is not deductible.

    --  Home Office Deduction: You may be able to claim a portion of
        your home as a home office if it's used exclusively and
        regularly for business. And don't forget the portion of the
        utilities such as electric and gas. Occasional or incidental
        use is not sufficient for claiming the home office deduction,
        however. Nor is working a couple of days a week from home
        because you begged and your boss grudgingly said 'oh, ok.'

    --  Extensions: There are many myths about requesting an extension
        to file your tax return. The most common is that an extension
        to file is an extension to pay. It is not. If you file an
        extension, you must first estimate your total tax liability
        for 2004 using the information available to you, e.g. wages,
        capital gains, etc. Make your estimate as accurate as
        possible. You must then submit payment for your balance due by
        April 15 or you'll be hit with penalties and interest
        (although the penalties will be lower if you file an extension
        than if you do not).

    --  Avoiding an Audit: Two common mistakes are often red flags
        that can trigger IRS contact: Failure to sign the return and
        including an incorrect Social Security number. Therefore,
        triple-check the return. Better yet, e-file too. It's quicker
        and you'll be notified by the IRS of some errors within
        24-to-48 hours. This gives you the opportunity to correct the
        mistake and resubmit. Statistics show that e-filed returns are
        99 percent accurate vs. 81 percent for paper returns.

The devil may be in the details when it comes to the tax code, but so too are the savings. If you're one of many who simply can't find the time to keep up with the latest tax code changes, remember that a trained H&R tax professional is always ready to help with information that can save you money and time.

If, on the other hand, you're a do-it-yourselfer who welcomes the challenge of deciphering the tax code, visit hrblock.com to take advantage of a wide range of free online information and advice.

Either way, make sure you're familiar with all available deductions and options so you don't pay Uncle Sam more than you should this year.

Please note: A condensed version of Tax Tips That Save Money is below; jpeg and pdf versions also available through H&R Block.

About H&R Block Inc.

Celebrating its 50th anniversary in 2005, H&R Block is the world's largest tax services provider, having served more than 400 million clients since 1955. The sixth largest retailer in the world, H&R Block has more than 12,000 locations serving taxpayers primarily in the United States, Canada and Australia.

For more information about the company, visit our Online Press Center at www.hrblock.com/presscenter.

Top Ten New "Tax" Year Resolutions You Can Actually Keep

You've just finished your year-end planning for your 2004 tax return. Now it's time to give some thought to the twelve months ahead. What are the most important steps you can take in 2005 to improve your financial health and shed unwanted tax liabilities? H&R Block has created a Top Ten list of New "Tax" Year Resolutions to help you get in shape financially -- and stay that way.

1. I will take charge of my finances - I will take control of my

financial future by developing a detailed understanding of my

income and expenses and by establishing clear financial goals.

2. I will keep better records - When receipts get lost, it's easy to

   miss out on deductions for charitable contributions, medical and
   educational expenses and business costs. Take a minute to develop
   a simple, fail-safe method for hanging onto to those annoying
   little slips of paper.

3. I will save for retirement - Start now. It gets here sooner than

you think. Not only will you be protecting your future, but you'll

enjoy tax benefits today.

4. I will review my W-4 Withholding - Fine-tuning your payroll

   deduction gives you the opportunity to increase cash flow, reduce
   year-end tax liability or boost your refund. Think about your
   financial requirements and objectives and take command of your
   paycheck.

5. I will file my taxes electronically - Whether you do it yourself or

   rely on H&R Block's tax professionals, filing electronically cuts
   tax preparation time, speeds your refund and lessens the
   likelihood of an error. With do-it-yourself options like
   Hrblock.com and TaxCut(R) software, you can take advantage of
   built-in questions, check-lists and safeguards, and even have your
   return reviewed by a tax professional.

6. I will know my tax rights - Because the IRS will allow taxpayers to

   amend returns filed in any of the prior three years, consider
   taking the free Double-Check Challenge: An H&R Block tax
   professional will check your past three tax returns to ensure that
   no deductions or credits were overlooked, the right filing status
   was claimed and the tax calculated correctly.

7. I will purchase a home - Buying a home can be one of the most

   positive and far-reaching financial decisions you will make. Not
   only are you building equity in an asset that typically increases
   in value, but you'll reap a number of benefits and deductions at
   tax time.

8. I will start saving for my child's education - In 15 to 20 years,

   it will take an estimated $170,000 to $230,000 to finance your
   child's college tuition and living expenses, depending on the type
   of school they choose to attend. So get started now. There are a
   wide range of college savings plans out there, and even a small
   regular contribution will grow and compound dramatically over
   time.

9. I will claim my education credits for classes - The federal

government has created several important credits and deductions

designed to help defray the cost of higher education. Talk to a

financial professional about how these options might help you.

10. I will deduct my student loan interest - Provided you fall within

    certain income guidelines, the IRS allows you to deduct the
    interest paid on any loan used exclusively to pay for education
    expenses (including room and board) for yourself, your spouse or a
    dependent.

CONTACT: H&R Block
Denise Sposato, 816-932-4909
dsposato@hrblock.com
or
Weber Shandwick
Dave Fransen, 952-346-6225
dfransen@webershandwick.com
SOURCE: H&R Block