Prosperity Campaign kicks off free tax filing program for low income households
Workers in Statue of Liberty and Uncle Sam costumes have started to appear on street corners. That means tax season is here. An organization that prepares taxes for free for low income individuals and families kicked off their campaign at Hillsborough Community College this morning.
The Prosperity Campaign of Hillsborough County connects low income families with programs to help them gain financial stability and find access to quality healthcare. This time of year they also push The Volunteer Income Tax Assistance program, or VITA. Stepanie Litteral is a volunteer tax preparer for that organization.
â€œFor VITA purposes, what we define as a low income family for tax purposes is $49,000 or less. So, a good majority of the population in Tampa Bay fits into that scope of $49,000 or less.â€
That income cap applies to an entire household income. That means a single mom could make more than $23 an hour and still qualify for assistance through the VITA program. A wage like that isnâ€™t often seen as low income. Thatâ€™s also one of the reasons not everyone takes advantage of available tax credits. Floridaâ€™s former Chief Financial Officer and the eventâ€™s keynote speaker, Alex Sink said Earned Income Tax Credit money gets left on the table more often then it should.
â€œIt wasnâ€™t being taken advantage of. That the people who could really qualify for it and needed it werenâ€™t necessarily filing taxes or understanding that they had the potential of receiving up to a $5,000 check as a refund in effect.â€
The earned income tax credit gives more than $3,000 back on a tax return for someone with one child and more than $5,000 for a filer with two children. Itâ€™s money that can help struggling families and individuals get out of financial trouble or make purchases they wouldnâ€™t have otherwise made. For Stacey Attwill it helped her accomplish something she never thought was possible as a single mother of two.
â€œI had to save $25 a month and over two yearâ€™s time I had to save up $2,000. To me that was overwhelming. She told me about the earned income tax credit. So, I did that. When I got my taxes back every year for two years, I took a huge chunk of the taxes and I put it in my savings account. This past June I was able to use the money from my taxes as well as the program that the United Way offered me, the IDA program and I just bought my own home.â€
Unredeemed tax credits equate to lost revenue for communities. Diana Baker is the head of the [United Way of Tampa Bay](http://www.unitedwaytampabay.org/0. She said the program has successfully boosted the number of people taking advantage of tax incentives so far, but she hopes the numbers will continue to grow.
â€œThis project prepared more than 71,000 tax returns and generated more than 65.5 million dollars in refunds to those families and individuals who have come through this program. 17 million of that is EITC return.â€
Alex Sink has frequently emphasized the need to educate taxpayers on financial responsibility. She calls it financial literacy. One of the most important things she says to do is to save money as regularly as possible and the earned income tax credit could make saving easier for people living paycheck to paycheck.
â€œAlmost 70% of the respondents said yes, they are making an attempt to save some money on a regular basis. But hereâ€™s the follow up question: Ok, good. So how much savings do you have? Six in ten respondents said they have one monthâ€™s salary or less in savings. If six in ten Floridians have less than one monthâ€™s savings, no wonder theyâ€™re freaked out about losing their job.â€
Member of Congress Kathy Castor was a Hillsborough County Commissioner in 2005 when VITA began.
â€œIt started off as a rather modest effort. But we knew how important it was to educate folks on the earned income tax credit and the other tax credits that are available and itâ€™s important for neighbors and the families throughout this community because it is an incentive to work.â€
And the VITA program isnâ€™t the only way people can get free help filing their taxes. Hillsborough Community College accounting and business professor Linda Tarrago started a similar program for HCC students. She said their tax dollars help pay for the school so it seemed only fair they should get some help getting some of that back.
â€œI had students sitting in the front of my classroom talking to each other about how much they were spending to have a 1040EZ done. $75, $150. And then they were telling me they couldnâ€™t afford their text book.â€
Stephanie Litteral of Suncoast Schools Federal Credit Union said the promise of an instant refund made by many seasonal tax preparation services that pop up between January and mid-April can end up being costly.
â€œYouâ€™re not really getting your refund. Itâ€™s actually a loan. Youâ€™re signing a loan contract at a very, very high interest rate; in some cases 200 or 300% interest to get your money. What happens is, theyâ€™re giving you a loan â€“ youâ€™re signing a loan contract â€“ but if there happens to be a problem with that return and the IRS rejects it, you now have no refund so you owe that company that lent you the money the money back. And in most cases, the financial institutions hold those checks anyway because we know that theyâ€™re a loan and we know that thereâ€™s a potential that they could do a stop payment on those checks. So, most institutions are holding them from anywhere from two business days to five business days.â€
Santiago Corrada, chief of staff for the office of Tampa mayor Bob Buckhorn, issued a proclamation making January 20th free tax preparation awareness day. Information on how to get help with tax preparation can be found on The Prosperity Campaignâ€™s website.
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