Once again, it’s tax season. Since 1969, the Internal Revenue Service has sponsored free tax preparation sites through its VITA (Volunteer Income Tax Assistance) Program. Volunteers, trained and certified by the IRS, prepare basic tax returns for low and moderate-income households. The United Way of Allegheny County works with more than 50 sites in various community locations through its Money in Your Pocket Coalition
The coalition was formed in 2006 to provide free tax preparation services to low and moderate income workers. They make sure that their clients receive their full tax refunds without fees or predatory loans. In 2009, they helped over 4,000 low-income workers complete their federal, state, and local tax returns at five locations throughout Allegheny County. Their clients received a total refund of $6.2 million, including $2.6 million in the federal Earned Income Tax Credit.
The coalition partners include Just Harvest in South Side, the Parental Stress Center in East Liberty, United Cerebral Palsy, and Goodwill in McKeesport. They are a part of the Internal Revenue Service Volunteer Income Tax Assistance (VITA) program. Their tax preparers are trained and certified annually by the IRS.
Most sites offer free electronic filing. There are income and other limits. If you want to complete your own tax return, you can do it online, and file electronically, for free, through the IRS Web site.
Taxes are a necessary evil. If we want paved streets, street lights, schools, police departments, public parks, interstate highways, courts, a national defense, safe food and medicine, clean air and water, safe and healthy workplaces, and everything else, then we have to pay for them. The government has to get its money somewhere.
The Sixteenth Amendment to the US Constitution, adopted in 1913, authorized the permanent income tax. The US Treasury Department, through the Internal Revenue Service (IRS), administers and enforces the tax laws. The US Tax Code is more than 18,500 pages long, and is so complicated that I won’t even try to explain it here.
The federal government permits deductions for student loan interest; contributions to IRA, pension, and health care savings accounts; employment-related moving expenses, military reservist travel expenses, military combat pay, unreimbursed employee work expenses, property taxes, state and local taxes, the self-employment tax, state sales taxes, mortgage interest and points, mortgage insurance premiums, charitable contributions, medical and dental expenses, and even the fees that you pay to your tax preparer.
There is an income exemption for you, your spouse, and each of your dependents, no matter how many there are.
There are credits for education expenses for both full-time and part-time students, the elderly and disabled, children, child and dependent care expenses, and first-time homebuyers. The Earned Income Tax Credit is available to many working low-income taxpayers, with or without children, and can increase the refund by up to a maximum of $5,657.
If you pay for union dues, uniforms, tools, supplies, or special licenses or training for your job, or if you use your personal vehicle on the job, and are not reimbursed by your employer, you can deduct those expenses from your state and local taxes.
Last year’s economic stimulus bill, also known as the American Recovery and Reinvestment Act of 2009, provides for several tax cuts for individuals in this year’s personal tax returns. This is your chance to get your piece of that pie.
• The first $2,400 of unemployment compensation is exempt from federal taxes.
• State and local sales and excise taxes on certain qualifying newly purchased motor vehicles is deductible.
• State and local property taxes are deductible, up to $1,000, whether you itemize deductions or not.
• The Making Work Pay Credit gives up to $400 or $800 in tax credit to working individuals.
• The American Opportunity Credit expands previous education credits up to a maximum of $2,500.
Naturally, there are rules and limits for each of these items. You may or may not qualify for any of them. Ask your tax preparer to make sure that you get all of the deductions and credits that you can. Please feel free to take this column with you to your appointment. Find out if it helps to itemize your deductions.
If you have troubles after filing your taxes, you can get help from the IRS Taxpayer Advocate Service. It’s an independent arm of the IRS and can help when other methods don’t work. The local taxpayer advocate’s office is in the Federal Building, downtown.
Now I like tax cuts as much as anyone does, but we can only cut so much before we cut our own throats. I think we’re at that point now. Alan Greenspan was wrong about deregulation and he’s wrong about taxes. Tax cuts do not create jobs. The government has been cutting taxes for thirty years. Where are all of the jobs allegedly created by those tax cuts? At that rate, we should all have five jobs by now. I don’t have five jobs. Do you?
For more information:
- The IRS Web site has general tax information, tax forms, instructions, and free e-filing options.
- You can reach the Taxpayer Advocate through the site, or call 412-395-5987.
- Find VITA sites in Allegheny County or call HelpLine at 412-255-1155.
From “Hidden History of the United States 2010 Calendar”, Progressive Magazine.
On February 4:
• 1869 – “Big Bill” Haywood, founder of the International Workers of the World, was born.
• 1899 – The Philippine insurrection against the US began.
• 1999 – Guinean immigrant Amadou Diallo was killed by four New York City police officers in a hail of bullets.
• 2006 – Betty Friedan, feminist author of The Feminine Mystique died.
On February 5:
• 1631 – Roger Williams, pioneer of religious tolerance and founder of Rhode Island, arrived in America.