• by Wendy Davis  @wendyndavis, February 1, 2005

After receiving W-2 statements at the end of January, taxpayers hit the Web in droves seeking tax preparation help, according to a report released yesterday by research firm Hitwise. Internet traffic to accountancy and tax sites--such as turbotax.com, hrblock.com, and taxACTonline.com--accounted for .26 percent of all Internet visits for the week ending last Friday--a sixfold increase from the first week of the year.

The spike appears even greater this time of year than around April 15, according to Hitwise. Traffic to tax-related sites represented .28 percent of all Web visits for the week ending Jan. 31, 2004, compared to .225 percent for the week ending April 17, 2004.

Last week, nearly one out of three visits--32 percent--came to the sites via links on the federal government's IRS.gov site, while 19 percent of visits came from search engines and directories, according to Hitwise.

Search engine marketer Dana Todd, executive vice president of SiteLab International Inc., said her company sees a large increase in searches for online tax help at this time of year. "Search query volume is at its peak right now," she said.

The queries taper off in March, then resume in April, Todd said. But keyword prices tend to be lower now than in April--sometimes two to three times lower--said Todd. For instance, words such as "tax information" were selling at more than $10 a click last April--much higher than in January, she said.

One reason, said Todd, is that tax software sites compete more with professional preparers in April than January. Consumers who visit tax software sites in January tend to have relatively simple tax returns that they can prepare themselves, without professional help, she said. But in April--when more consumers want to hire lawyers and accountants--professional preparers buy more sponsored listings, which drives up the price.

Hitwise found that Web users with household incomes ranging from $30,000 to $60,000 accounted for 38 percent of visits to tax sites; more affluent filers were less likely to go to tax-related sites, said Hitwise Vice President of Research Bill Tancer. "As income bins go up, those populations are less likely to visit these sites," Tancer said.