City Housing Authority Offering Free Income-Tax Help
Mariluz Meza, left, a longtime VITA volunteer and assistant site coordinator, helps with income-tax preparation at one of the Housing Authority of the City of Santa Barbara centers. (Housing Authority of the City of Santa Barbara photo)
It’s not surprising that during this difficult economic climate, many people are facing tough choices about where their hard-earned dollars go. This tax season, the Housing Authority of the City of Santa Barbara’s volunteer income-tax preparation team is seeing an increase in impact of the past year’s steady rise in unemployment and unemployment benefits claims; a surge of lost wages, an alarming trend of people making early withdrawals from their retirement plans, and taxpayers falling prey to the hidden costs of rapid refund services. Each of these situations may have an effect at tax filing time, and some may involve serious financial consequences.
To help alleviate some financial strain and educate the community about the basics of tax preparation, the Housing Authority of the City of Santa Barbara has opened its free income-tax preparation centers for those who qualify. This is the Housing Authority’s ninth straight year of assisting in the preparation of income tax returns for low-income earners in the Santa Barbara community, as well as all Housing Authority residents.
In 2009, the Housing Authority assisted more than 1,000 people — resulting in record-level refunds totaling $1,028,453, the highest total ever in the history of the Housing Authority’s Volunteer Income Tax Assistance program.
“This year, more than ever, we feel the VITA program is a critical service for those who qualify, to prepare for tax season,” said Frank Quezada, resident services supervisor for the Housing Authority of the City of Santa Barbara.
The Housing Authority offers free income-tax preparation in English and Spanish, through the VITA program, to low-income individuals and households, families, seniors and the disabled with earnings up to $49,000 depending on their tax status.
“We also continue to make it a priority to educate taxpayers to make sure they are receiving the tax benefits they are entitled to, but also about the potential consequences of choices they make during this tax year, especially in relation to the effects of the economy on jobs and incomes,” Quezada said.
The Housing Authority’s VITA program also helps individuals claim any special tax credits they are entitled to for the 2009 tax year, including:
» Earned Income Tax Credit — A federal income tax credit for low-income workers who are eligible for and claim the credit, which reduces the amount of tax an individual owes, and may be returned in the form of a refund. (The taxpayer must have a valid Social Security number; the EITC is not available for people with Individual Taxpayer Identification Numbers (ITIN) only.)
» Child Tax Credit — If you have a child younger than age 16, you may be eligible.
» American Opportunity Tax Credit — For qualified college tuition and related expenses.
» Recovery Rebate Credit — A one-time benefit for people who didn’t receive the full economic stimulus payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion.
This year, there are 23 trained volunteer tax preparers from local nonprofits and businesses including: the Housing Authority of the City of Santa Barbara, Santa Barbara Bank & Trust, Women’s Economic Ventures, SBCC, Housing Authority residents, private citizens and the Internal Revenue Service. This year, United Way of Santa Barbara County provided the Housing Authority with a grant to purchase additional computer equipment,
As in years past, the Housing Authority’s tax-preparation centers are a collaborative effort. The Housing Authority provides the supervision, staff, locations, Internet access, materials and supplies for the tax centers, and the IRS provides the training, software and technical support.
Housing Authority’s Tax Tips Related to Economy
» Unemployment benefits are taxable income. When recipients elect not to have taxes withheld from unemployment benefits, there may be an impact on their tax return.
» Retirement account early withdrawal. If you have lost your job or are considering withdrawing funds from your retirement account, seek the advice of a licensed financial adviser so you can roll over your retirement savings. Otherwise, you may face federal and state taxes and significant early withdrawal penalties.
» “Rapid Refunds” warning. Be wary of services that advertise “Rapid Refunds.” These are actually bank loans with high interest rates and can have very expensive consequences, with fees exceeding $200. At the VITA centers, tax returns are prepared by computer and electronically filed. Filers also can request that any refund be electronically deposited into a bank account.
» Financial literacy. Educate yourself. Come to HACSB Financial Literacy workshops for free education (spring workshops are full; sign up for fall workshops).
» Financial advice. If you’re seeking financial advice, choose a licensed financial adviser.
» Who can use free VITA services. “VITA” is a free income-tax preparation program for the community, for earners with incomes up to about $49,000 annually per family. The Housing Authority of the City of Santa Barbara’s two VITA centers are open through April 15, per the days and hours below. The VITA centers offer free tax preparation for people who earn $49,000 or less.
» What you need to have your taxes filed. The documents necessary to file your income taxes include employment wages, self-employment earnings, and any unemployment and interest income: documents you should bring include a copy of last year’s tax return forms (2009), including W-2s, 1099s, 1098s. You should also bring a California driver’s license or ID, Social Security cards or ITIN cards for all family members; information of all deductions/credits, such as your child-care provider’s name, address, Social Security or Tax ID number. Also, if you are self-employed, bring your accounting ledger.
» Additional tax credits. You may be eligible for any of a number of tax credits if you are aware of the criteria and can provide the appropriate information. Some of these tax credits include the “Child Care Tax Credit” and “Earned Income Tax Credit” (EITC). EITC is a credit for taxpayers who work and have an income under certain thresholds. A tax credit usually means more money in the pocket of the tax payer. The taxpayer must have a valid social security number; the EITC is not available for people with ITINs only.
» Stimulus payment or “Recovery Rebate Credit.” If you are not required to file tax returns, it is still possible to take advantage of the stimulus payment program. If for some reason you did not file 2008 taxes, it is still possible to receive the stimulus payment by filing a 2009 return. If you have access to the Internet and need more information, click here or call 800.829.1040.
» Choosing a paid tax preparer. If you choose to use a paid tax preparer, it is important that you find a qualified tax professional. It is important that you look for a qualified and professional person, because in the end, you are ultimately responsible for reporting your income to the federal and state governments.
» Social Security numbers and ITINs. If you don’t have a valid Social Security number, the VITA centers can help you apply for an ITIN from the IRS. (The IRS is not concerned about taxpayers’ legal status in the country, but that you do report your income and file taxes.)
» IRS link and more information. The IRS Web sites www.irs.gov and www.irs.gov/espanol offer tax information for individuals and small businesses. For individuals, the Web page contains forms, publications and brochures that provide detailed tax information. Their interactive system can help determine EITC and can even calculate your tax rate, and find out the status of your refund. You can also call the IRS customer service number at 800.829.1040.
» VITA centers can help prepare: Forms-1040 EZ, 1040 A with schedules 1 and 2, 1040 with schedule B, EIC & R, 1040-V, 1040-SE, Form 2441 (Child and Dependants Care Credit), Form 8863 (Education Credits) and Form 8812 (Additional Child Tax Credit).
Tax Preparation Center Locations and Hours
» Family Opportunity Center, 526 W. Montecito St. Open Mondays and Tuesdays from 5:30 p.m. to 8 p.m. and Saturdays from 9 a.m. to 3 p.m. until April 15 (except for holidays). The center also will be open from 9 a.m. to 3 p.m. April 17 for extensions.
» Paseo Voluntario Learning Center, 309 S. Voluntario St. Open Monday, Tuesday and Wednesday from 5:30 p.m. to 8 p.m. until April 15 (except for holidays). The center also will be open from 5:30 p.m. to 8 p.m. April 15 for extensions.
Service is based on first come, first served. Call in advance for schedule changes: 805.730.1188 (Montecito Street) or 805.966.6581 (Voluntario Street) during the hours above. Appointments are available; walk-ins are welcome.
» Click here for a list of all VITA tax centers available in Santa Barbara County.
— Candice Tang is a publicist.