Taking the scare out of tax season
United Way offers free tax preparation for those making up to $60,000
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For some, tax time is scary. If they are “gig” workers, like Door Dashers or Uber drivers, they likely have a decent-sized tax bill coming. For some, the filing process is daunting. Tax forms aren’t exactly easy to complete. That’s why there is a multi-billion-dollar industry built around filing taxes.
But it doesn’t have to be so scary or expensive. The United Way serving Howard and Tipton Counties has offered free tax services to lower-income individuals and families for nearly 30 years. According to United Way operations manager and veteran tax preparer Cheryl Graham, there is no reason to pay for software and filing fees online, particularly for those in lower income brackets.
“Our free tax preparation program is available to people making up to $60,000, but we aren’t serving many people at the top of that limit,” said Graham. “Our average client’s income is only $21,000. These are people on the low end of the spectrum who are working, but don't make enough money to afford anything more than living.
“But when you look at the average return people get back versus their income, their refund is like a six-percent raise. That's huge. They need a new septic tank. They need to fix the car. The window is broke. The kids need clothes. That six percent meets needs. They aren’t running off to Florida. They are taking care of their families.”
Last year, United Way’s tax service brought more than $800,000 in disposable income to the local economy simply by getting returns filed and refunds into the hands of those who need it. Graham estimates that number will increase, especially since the service is on pace to serve more than 100 Tipton County residents as the service has expanded.
That revenue is a major reason United Way provides the tax preparation service. And just as important, the nonprofit is there to chase away the fear and uncertainty surround the Internal Revenue Service (IRS) and the taxing process.
“The IRS is not as scary as most people think,” said Graham. “Do you know anybody who's ever been audited? They're not looking for the little guy. In fact, they offer myfreetaxes.com as a free filing resource for everybody making $76,000 or less. You don't have to buy software. You don't have to answer those endless questions about things that don't matter.”
Not everyone qualifies for the United Way’s services. The IRS dictates who may be served by the nonprofit. Businesses, for instance, may not file taxes through the United Way or the IRS’s free e-file service. The self-employed, those with rental properties, those with special retirement disbursements; they must file themselves or work with a certified, for-profit tax preparer.
The fastest growing population of workers utilizing United Way’s tax preparation service come from the “gig” economy. These are contract workers receiving 1099 forms whose employers don’t withhold taxes. Graham explained that tax time can be painful for these workers.
“They don't get any tax kept out, so they're getting hit pretty hard,” said Graham. “We have to talk to them about how to keep expenses in line and itemize.”
Graham stressed that the most important thing is to get the taxes filed. If a refund is coming, there is no penalty for failing to file, but after four years, the IRS won’t honor the refunds, Filing annually avoids that.
Keeping tax records is also vital. Employers must provide proper tax documents to their employees by Jan. 31 each year. For those itemizing expenses, documentation is necessary. Without proper paperwork, the tax filing process can drag on for months. Graham said the United Way’s tax preparers will continue working on delinquent filers until November each year.
Fortunately, the service is blessed with a devoted group of volunteers and some significant help from Indiana University Kokomo.
“This program probably would not happen without (IU Kokomo Professor) Olga Korn,” said Graham. “Most of our prepares are IUK students from her tax class. She requires them to get certified and prepare taxes as part of the course work. So that is our base of volunteers each year.
“We get interns from IUK there as well, usually one or two, who will work 20 hours a week. The students are required to put in at least 10 hours. All volunteers are special, but these people have invested. They have to take four tests to get certified by the IRS to be able to do this.”
Tax season runs until April 15. Those seeking filing assistance from the United Way should visit any public library in Howard and Tipton counties where they can pick up a tax preparation packet.
This packet has all of the necessary forms and instructions. A list of necessary items and information can be reviewed in the graphic accompanying this article.
Fill out the information requested and return the packet to the library. The United Way will collect the packets and complete the tax returns.
Once complete, the United Way will contact the filer and review the tax forms with them before filing.
For those with questions, call 765-450-7619 or email freetaxprep@unitedwayhoco.org. Additional information about the tax preparation service can be found at www.howardtiptonunitedway.org .