Faith Based & Neighborhood Partnerships

Tax Season is Here - Are You Aware of Tax Credits, Free Tax Prep Services, and Savings Options?

Posted by Ben Seigel - On January 27, 2012 (EST)

Guest Blog: Tax Season is Here - Are You Aware of Tax Credits, Free Tax Prep Services, and Savings Options?

by Joanna Smith-Ramani

January 27, 2012 is annual Earned Income Tax Awareness Day. To promote "EITC Day" the Partnerships CoP asked Joanna Smith-Ramani from the D2D Fund to write a guest blog for us on important resources available to job seekers and workers.

 

It is tax time.  Many of us think tax time only offers bad news.  But, this year may be different for you.  Depending on your household income, you may be eligible for great federal tax credits you have not benn eligible for in the past, you could be eligible for free tax preparation, and there are easy ways to save at tax time – even if you do not think you can spare anything right now. 

 

Tax Credits:

Did your household income change in the past year?  If so, you may be eligible for federal tax credits that you have not been eligible for in the past.  And these tax credits can be worth thousands of dollars!  The most common tax credits are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), although there are others.  For income earned in 2011, the EITC can be worth up to $5,100 depending on income and family size.  The CTC is worth up to $1,000 per qualifying child.  These tax credits can be combined to help offset any taxes you owe the federal government and – even better – can help increase your refund depending on your tax situation.  Do not worry about knowing all of the details, your tax professional or tax software can help you compute the tax credits into your return.  Just remember, your tax liability changes from year to year – especially if your household income changed.  So, make sure to get help with your taxes so that you do not miss out on any opportunities to get the tax credits you are eligible for!  Click http://eitcoutreach.org/category/assistance-for-individual-taxpayers to learn more.

 

Free Tax Preparation:

Another way to save?  Free tax preparation! Throughout the country, trained and certified volunteers working through the IRS Volunteer Income Taxpayer Assistance program (VITA) help over 1 million people file returns for tax filers earning under $50,000.  Check out this site to see what is available in your area: http://www.irs.gov/individuals/article/0,,id=219171,00.html.  You can also try to file online for free if you are eligible.  Click on http://freefile.irs.gov/ and it will walk you through the process of preparing your own return using online, free software. 

 

Saving at Tax Time:

Saving may be the last thing on your mind right now.  But, tax time can be the best time to save – even if you have immediate needs for your refund.  Right on the tax form, you can elect to SPLIT your refund into multiple accounts and U.S. Savings Bonds.  So, you can put some money in your bank account for immediate needs now and save a little for later.  Think about this: if you are eligible for tax credits and are using a free tax preparation service, you have saved a bunch of money this tax season and potentially receiving a bigger refund than you expected.  With as little as $50, you can stock away a portion of that refund direct into U.S. Savings Bonds and know that you made a great financial decision for you and your family.  Check out www.bondsmakeiteasy.org for more information on Tax Time U.S. Savings Bonds.  

 

This tax season, you can catch up AND get ahead using the information above.  So, take the information and share with family, friends, and others in your community.  Everyone should know about how tax season can HELP!

 

Joanna Smith-Ramani serves as the Director of Scale Strategies for the Doorway to Dreams Fund (D2D). D2D is a national non-profit focused on strengthening the financial opportunity and security of low and moderate income consumers.

 




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Modified On : August 30, 2012
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