LOCAL SPIN: Stake Your Claim
Smart tax prep puts more dollars into the community.
Thursday, April 5, 2012
Lori is a single mom with two kids in college. She works full-time at a local jewelry store and her daughters work part-time as well. With an annual salary of $20,000, her budget is very tight and she was eager for a tax refund. She came to one of United Way Monterey County’s Volunteer Income Tax Assistance sites the first day we opened.
A few years ago, Lori had stopped claiming her daughters as dependents because she thought they longer qualified; they were over 18 and earning their own money. After a thorough interview, the volunteer tax preparer discovered she could claim her two daughters because they were full-time students under the age of 24. Lori also learned she could claim the Earned Income Tax Credit (EITC) for a total refund of more than $4,000. She scheduled an appointment to amend previous returns to include her daughters.
Lori isn’t the only one who benefited. Each EITC dollar brought back into Monterey County is estimated to result in a stimulus to the local economy of $1.40. That means as Lori spends her refund, approximately $5,600 flows through local businesses. That helps us all.
Part of United Way’s “EarnIt! KeepIt! $aveIt!” service, VITA is designed to help workers keep as much of their own money as possible. With the average filer paying $220 to prepare their taxes, the savings begin immediately when using VITA.
VITA is a tribute to the power of volunteers. Dedicated volunteers include CSU Monterey Bay students, full-time workers, retirees and people between jobs who want to learn a new skill. They are 119 strong.
They also are IRS-trained and certified. Each week, they show up at sites throughout Monterey County to help ensure each and every person gets the biggest refund for which they qualify.
“I’ve never seen so many unemployed taxpayers seeking VITA services,” says longtime volunteer Diana Carillo, regional director of the Center for Employment Training. “The heartfelt gratitude expressed reinforces the need to continue and expand this service. Everyone benefits.”
Javier is a single father who earned $14,800 in 2011. His EITC brought his refund to $7,500 – money he’s using to fix his car so he can continue driving from South County to his job in Salinas.
Even if they are not required to file, anyone who earned less than $50,000 in 2011 should file and claim the EITC. This year the maximum credit is $5,751, which for many low-wage earners represents the largest lump sum payment they will receive during the year. Eligible taxpayers can only get their EITC if they file federal income tax returns and claim it.
Lily only worked a few months in 2011 and was not required to file. However, she’d heard about the credit and came to the Marina Library site. Not only did she qualify for a $885 EITC, she also learned about other United Way services such as 2-1-1 and the FamilyWize Prescription Drug Discount Card. Lily left armed with new ways to stretch her limited income.
In Monterey County, the IRS estimates that 10,810 households fail to claim their EITC, leaving $16,157,443 on the table. The average unclaimed EITC is $1,495. That’s money that could be used to purchase school supplies, pay rent and repair the family car.
Last year, 1,273 filers used VITA to claim $2 million in refunds and credits. United Way expects to increase that by 25 percent this year. Applying the $1.40 stimulus factor, that’s more than $3 million that would otherwise not have come back into our county to strengthen our local economy.
The success of the service is a tribute to the leadership of United Way and the cooperation of our many partners, which include the Internal Revenue Service, Monterey County Department of Social and Employment Services, CSU Monterey Bay, Golden 1 Credit Union, Rabobank, Bank of America, Wells Fargo, Union Bank, Driscoll’s, Center for Employment Training, Monterey County Free Libraries, Salvation Army Salinas Corps, Alisal Family Resource Center, Castro Plaza Resource Center and Hartnell College.
In addition to the regularly scheduled sites, people have two last chances to file their taxes. Appointments are highly encouraged for these two last dates but walk-ins will be accepted as time permits: Sunday, April 15, 2pm-6pm at the Salvation Army, 2460 North Main, Salinas; and Tuesday, April 17, 5:30pm-8pm – the last day to file in 2012 – at the United Way office at 376 Main St. in Oldtown Salinas. Call 372-8026 to schedule an appointment.
KENT HANSEN is a senior vice president at Dole Fresh Vegetables Inc. and chair-elect of United Way Monterey County.