Volunteer Income Tax Assistance

Tax season is over and I stopped blogging near the beginning, so I haven't had a chance to share about my experiences. As some readers will know, I've worked with taxes the last four years as a part of the Volunteer Income Tax Assistance (VITA) program. The program is established by the IRS and includes training (online or book) and certification to assist taxpayers with their taxes. We use software designed specifically for the VITA preparers and have support from the software company.

Locally, the program is coordinated by the United Way, who provides laptops and additional "volunteers". I put the word "volunteers" in quotes as the people are typically Americorps workers. I don't know a lot about Americorps, but I think the workers get a small stipend (and medical benefits) for their work and have to provide a certain number of hours. They can use their VITA time as a credit for those hours.

This year I went through certification to the Advanced level (Basic-> Intermediate-> Advanced) and stepped up to Site Coordinator certification. (last year I didn't do Site Coordinator, but did Military, Cancellation of debt and Health Savings Account certification). I also stepped up to the responsibility of Site Coordinator 1/2 time at one of the sites where I work.

This year we had to take an ethics test as a part of certification. The ethics questions were VERY basic, but the scary thing is that you know someone has violated each of the codes they gave us.

As a part of the program, we're not allow to discuss any details about the taxpayers. I can tell you that this year was busier than the last two years. I also believe that I processed less W2-G (unemployment) forms than previous years. I think these two facts show that more people have jobs. They may be lower paying jobs than they had previously, but they have jobs.

I also think I did more past-year (2010 & 2009) taxes than in previous years. These are people who didn't file for some reason or another (one person said he was asleep that year - must've been a good nap!) and they want to get caught up. It makes me feel good to help people like this. As someone who pays a lot of taxes, I'm always anxious to help others pay their fair share.

There were some low points to the year. A few people seemed intent on cheating the system or making up numbers. One man came in the last day (we were slammed and a volunteer short) and wanted me to do his 2010 taxes. I was unable to help him. He honestly believed he didn't need to file, as he was retired. The IRS sent him a letter explaining differently. I felt bad for him, but simply didn't have time. I did do his 2011 taxes.

Lessons for next year is for me to start earlier. The site coordinator role was less intense (but more nerve-racking) than I imagined. But there was more training available that I could have used greatly. Also, I should have done the training on Cancellation of Debt (one case came in, I handled it after a lot of research) and Health Savings Account (three taxpayers needed help - two were family). These areas aren't so complex, but a refresher would have been good.

I also had a chance this year to explain to a fellow conservative IN DETAIL how the Earned Income Tax Credit works. It was an enlightenment to him that I had so much information and that some of his information was wrong. Any reader who wants to know more, or thinks the program is full of holes, needs to send me a note and I'll help them understand the details. I'm not justifying the program, I'm saying this is how it works and if you want to eliminate it, you have to say so explicitly (my biggest complaint with the "Fair Tax" and 9-9-9).

I plan to continue and to be site coordinator again next year (if needed). The work is very rewarding. I tried to recruit a couple of people this year and failed. Next year, won't you help? I'll be glad to help with training and information.

Taxes!!!

It's that time of year again, the time when we all start looking at income taxes. This year, we get an extra 3 days to fill out the forms, they aren't due until April 18. That's because April 16 falls on a Saturday. Confused? Well, April 16 is Emancipation Day, a holiday in Washington DC. This marks the anniversary of the date Lincoln freed the 3100 slaves living in the District of Columbia.

Since Emancipation Day falls on Saturday, residents of DC will celebrate the holiday (by taking a day off work) on Friday, April 15. Since tax returns can't be processed on a holiday, they aren't due until Monday, April 18.

We may need that extra time, because many people are being asked to wait until mid-to-late February to file. This IRS bulletin indicates that anyone who 1) itemizes deductions, 2) claims the deduction for higher education or 3) claims the Educator Expense Deduction should wait. Of course, you can start your return earlier, but you'll do better to wait until the final forms are available.

If you don't fall into one of the three categories above, you can start on your 2010 taxes anytime. If your income us $49,000 or less, you qualify to have your taxes done for free by IRS trained volunteers. Also, the IRS helps the elderly with their taxes. And there are many websites that allow free filing for taxpayers.

So start gathering your receipts and get your taxes ready. There are only 102 days left.

VITA/TCE Certified

Ok, my long term readers are probably thinking, hey, I've read this post before. True, last year about this same time I did post an article with this same title (see here). They may remember that I volunteered (that's the "V") to provide Income Tax Assistance to low-middle income people as well as Tax Care for the Elderly (see how I snuck the acronym in there?). I reported last year (here) that I did taxes for about 100 people.

Well, I'm back at it this year. I passed the basic exam one day earlier this year (simple coincidence) and have decided to step up a notch and took the intermediate exam. I passed that one too, so I will be allowed to do slightly more complicated exams this year. We start doing taxes on January 30 and continue until that magic day in April (which my family knows the reason for the magic). I will do taxes on Friday and Saturday afternoons (assuming I get the slots I requested).

This year there are a few changes. There's a new $400 ($800 for joint taxpayers) credit called Making Work Pay. It requires a new form, but it's relatively simple. (Special note to my son - you don't get it because you're my dependent.) And of course there's the first time home-buyers credit, but few of my expected clients are likely to qualify for that (likewise the follow-up home-buyers credit). I'm prepared just in case as I helped out one tax payer after the tax crush last year with their form 5405 and I'm expecting to help another in May of this year.

As usual, one of the most complicated forms is for Earned Income Credit. Sadly, the people who need the credit the most are the least likely to understand. I never even try to explain Advanced EIC. And I spent a lot of time this year trying to make sure I understand the tuition tax credits. Did you know there are FOUR different ways to claim tuition credits? And the law has changed (for the positive) on what you can claim. This credit helps those who are in school (or paying for someone in school). I think it's great because in theory, this will result in a future big income and support for me when I'm collecting Social inSecurity.

I did my own taxes on paper for a number of years. For most people, it's not that hard. You don't have to go to some store-front tax location (that will be gone after 4/15) and pay a few hundred dollars to get your taxes done. If they are that complicated, it's worth paying a REAL professional to have it done. If you need help, look for a VITA site near you (search on VITA on the IRS website). Avoid those Refund Anticipation Loans (see here for another reason to avoid them).

I'll report back here in April with a final comment.

VITA/TCE Update - End of Job

Back in February, I proudly announced that I was VITA/TCE certified. This program (certified by the IRS) allows volunteers to help low income and/or elderly prepare their taxes. Locally, it's administered and coordinated by the United Way.

Since I've only been doing this on Friday & Saturday, this was my last week. After 23 sessions of about 4 hours each, I have prepared taxes for around 100 people. I also did state taxes for these people and in one case, NC state taxes. I would like to say that I thoroughly enjoyed the process and hope that I can do it again next year.

In all of these tax forms, I found exactly one person that might have been actively trying to skirt the law and exactly one person who actively avoided filing taxes (he "missed" at least two previous years and I think only filed this year at the urging of his girl friend). Two bad apples out of 100 isn't a bad record.

Some of the "customers" I worked with were young (20's or less) and some really wanted to understand the process. For these people I worked a little harder to explain the forms and make some suggestions. Some were older and were happy to have me talk to them as I punched buttons on the computer. Most went out of their way to be nice. One even hugged me. A couple were veterans and I thanked them for their service.

The funniest moment was when the Site Coordinator came in and announced "Sorry I'm late, I just got out of prison." Lots of heads turned as they wondered whether he would do their taxes. (He had been involved that morning with Prison Fellowship Ministries - Neil, you should use this line.)

Hardest moment was when a 3 year old flipped a fire alarm and I had to continue preparing taxes for others who had been waiting 2-3 hours with the siren blasting.

All in all, this was a good experience for me and I'm looking forward to more community service like this.

Can you do your job TOO well?

Suppose that you were in a job where a lot of people were doing the same thing. Now suppose all of the people around you were failing at their job, but you were succeeding. The boss comes around, you would expect he would praise you, right?

Well not if you were a bank. Seems a bank in Massachusetts was doing a good job. Actually, an exceptional job. They had NO bad loans. While this article isn't clear, I would assume they got no TARP money since they had no Troubled Assets that needed Recovering (that's the TAR part of TARP).

But instead of praising the bank, the FDIC is criticizing them. Saying they should have taken more risk. Helped out "the community" more. Now I'm all about helping the community. Search back through my blog for the word VITA and you'll see the way I'm doing this now. Taking every Friday & Saturday afternoon, not to mention the classes I went to before that. But that's my choice.

If this bank wants to help the community, there are lots of ways they can participate. I'm willing to bet they already help in a lot of ways, they've just chosen not to write bad loans. Isn't that what got us into this trouble?

VITA/TCE Certified - Update

About a month ago, I reported that I was VITA/TCE certified (see here). I thought I'd offer an update.

VITA stands for Volunteer Income Tax Assistance and TCE stands for Tax Care for the Eldery. Locally, it's administered through the United Way, but the IRS provides the training material, the software we use and some of the hardware (some laptops). The goal is to help those with low-moderate income with their taxes. We do e-filing for both federal and state (SC).

I went through a few classes (it started out as six, but after the first three, much was repitition) provided by two VITA site coordinators. The key to remember in all of this is that V stands for volunteer (as in no-pay). At the end of the classes I had a good feel for the software, a better understanding of taxes, and a little bit of information on how the process works.

I've now spent three Saturday afternoons and two Friday afternoons preparing taxes for others (still haven't done my own yet). I've probably filed taxes for over 30 people (I wish I had counted). For their privacy, I can't say a lot about them, but I will say I have been pleasantly suprised at the attitudes. No one has gotten upset at me and with only one or two exceptions, they haven't asked the government to do more for them. Most are very polite, with several of the young adults being overly polite (yes sir, no sir, thank you sir).

There has been some challenges, like the 3 year old girl who pulled the fire alarm, but there have also been some very good points, like the three young boys, around age 10, who were quietly waiting for over an hour, then helped stack chairs while someone else helped their mom. We are looking for them to come back next Saturday to help stack chairs again.

The site coordinator at one of the sites I work came in this last Saturday and announced he was late because he had been in prison. I'm sure some of the taxpayers raised an eyebrow, but he later explained he was working with Prison Fellowship Ministries, like my blog-friend Neil.

I have another two months to go, but so far, I'm enjoying providing this service to others.

VITA/TCE Certified

Last night I took the Basic Exam for the Volunteer Income Tax Assistance (VITA) and Tax Care for the Elderly (TCE) Certification Course. It's pretty tough, with 30 questions ranging from filing status to dependency questions. You also have to fill out two complete 1040's along with supporting forms to answer some of the questions and then do a review of someone else's form. The test is administered electronically.

The big news: I passed!! I'm now officially certified. I've probable spent somewhere around 40 hours working on this and probably around 20 of those in the last 3 days. So this was a big victory for me.

Tonight I start the software training, 6 nights of classes, 2.5hours each night. Then I start preparing taxes the following weekend. Right now, I'm just enjoying looking at my laser printed - suitable for framing, certificate.