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.

Another reason not to RAL-ly (*Updated*)

Has your stimulus check arrived yet? Still waiting on that $600 (or $1200 or $300) to arrive so you can go stimulate the economy?

Well, it turns out that if you got a Refund Anticpation Loan (RAL), you may have to wait a little longer.

USA Today says "taxpayers whose fees were deducted or who took out refund-anticipation loans are receiving paper checks because those loans involve a third-party bank account." (see the full article here)

Now I personally believe these RALs are a RIP-off. They allow you to file your taxes and then get your money in about a day or two. For fees of $200 or more. I know people who got their refund check in under two weeks. So let's say your refund is $400, you take a RAL (or "rapid refund") and walk out with $200. You've effectively borrowed that $200 for two weeks. I don't even want to think about the interest rate involved.

But now, to make matters worse, your stimulus check is being delayed because of that. Where's the good in this?

(Preview announcement: By special request, I intend to blog on Cash Advance stores next week. Watch this space!!)

*** Update
One of my faithful readers found out (the hard way) that their stimulus check was delayed, not due to a RAL, due to paying Turbo-Tax with the refund. When you file online, you can file free when your income is below a certain level. Above $54,000 in income and you'll have to pay. So, let's say you use TurboTax (I think other tax preparers do the same thing) and find out you'll get a nice refund. You can allow TurboTax to take their fee out of the refund.

However, since TurboTax is an intermediary in the tax process, your stimulus check will be on paper, instead of direct deposit.