Don’t miss your earned income tax credit

When it comes to filing your taxes this year, you might be able to get some help without having to fork over a tax preparer’s fee. And you might even qualify for a tax credit that you didn’t know about.

Community Action Duluth is kicking off its annual free tax preparation service for 2013 and encouraging qualifying low- and middle-income residents to take advantage of the earned income tax credit.

“People who are eligible may miss out on this because they think they don’t have to file a return or they’re afraid of doing it or don’t think it’s worth it,” said Julia Cheng, the tax site program coordinator at Community Action Duluth.

“The EITC works like a refund to low- and middle-income taxpayers who may have one, two or three qualifying children, or lower-income single people,” she said. “It’s supposed to offset the withholding of Social Security and Medicare.”

Community Action Duluth will be providing free tax services and helping determine EITC eligibility for households and individuals earning up to $49,000 a year, beginning Monday at three Duluth locations.

Services will be available on a drop-in basis at the nonprofit’s Lincoln Park headquarters on Tuesdays and Saturdays, as well as by appointment Thursdays at the Ordean/United Way building. Appointments for taxpayers with dependents, senior citizens and people with disabilities will also be available Monday and Wednesday evenings at Laura MacArthur Elementary School.

More money in the hands of local taxpayers means more local economic growth, Cheng said.

“Families spend money fairly quickly on rent, food, bills, medical bills, paying down debt,” she said. “We really encourage people to use an IDA savings account.”

An IDA, or individual development account, is a type of account that allows low-income individuals and families to earn matched savings from public and private sources. By enrolling, low-income people are able to earn rapid growth on their investment in order to purchase a home, pay for education, or start or expand a business.

“I was small-business track advisor and I had clients who used that money to buy equipment, start a gardening business or a jewelry-making business. One bought a language translation and interpretation business,” Cheng said. “You can take that credit and make pretty good progress in getting out of poverty.”

Community Action Duluth recruits dozens of volunteers every year to prepare taxes. Last year, 98 IRS-certified volunteers prepared 1,584 tax returns, according to the organization. Cheng said she expects to see as many, or more, this year.

“There are some types of returns that we don’t handle, but we can generally help about 90 percent of the people who come to us,” she said. “On Saturdays, people line up two hours before the doors open, or they won’t get a slot.”

Other tax preparation services are also available in Duluth. Volunteers from the University of Minnesota Duluth accounting department will be available in the Gold Room of the main library beginning Feb. 9. Services will be available from 2 to 7 p.m. Mondays and 10 a.m. to 4 p.m. Saturdays through the tax season.

AARP will also be sponsoring tax preparation assistance for taxpayers at several locations in the Twin Ports, including CHUM, Rainbow Senior Center, Gloria Dei Lutheran Church, Lincoln Park Community Center, Ecumen Lakeshore, West Duluth American Legion and the Proctor Area Community Center.

“(AARP) never really pushed any income guideline or age requirement,” said Donna Gerdes, a Gloria Dei secretary who manages the program for that location. “The biggest purpose is to just make sure that people can keep their returns, and not have to pay exorbitant fees.”

The service at Gloria Dei, which is in its sixth year, helped 100 people get more than $100,000 in returns last year, Gerdes said. Spots are already filling up for this year, she said, and it’s better to get a spot early, rather than wait until the last minute.

“Towards the end of the year, there’s a mad scramble to get them done,” she said.

Gloria Dei’s service begins Feb. 6 and runs from noon to 5 p.m. every Wednesday, by appointment, through the end of tax season. Hours and services vary by location for other AARP-sponsored sites. More information is available online at aarp.org.

No matter where you go for free tax preparation, you’re reminded to bring along certain documents to expedite the process, including the previous tax year’s return, all W-2 and 1099 forms, any other tax forms you typically fill out, social security numbers and a photo ID. And if you bring your banking information, you can get your return directly deposited even more quickly.

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