Volunteer Income Tax Assistance (VITA)

As you know, filing a tax return can be very confusing and intimidating. For this very reason, many people use the services of a commercial tax preparer, which may cost $55 to $130. Since many tax filers would like to get their money as quickly as possible, tax preparers often persuade the filer to go for a “refund anticipation loan” (RALs) or instant refund, which can cost another $100. That means that the tax filer could already have lost up to $230 from their tax refund!

Low income workers need every penny of their tax refund and cannot afford to be losing part of it to tax preparers. However, they may not know what options are available to them.

A cost free alternative to commercial tax preparers is VITA- Volunteer Income Tax Assistance- a program run by the IRS and community based organizations. VITA volunteers are trained to fill out basic tax forms, including ones needed to claim the EITC. And the best part is that there is no charge! Many VITA sites can file tax forms electronically, which results in a faster refund.

For additional information on the VITA program in Forsyth County, watch this interview with Kindra Speech, EITC Program Manager at Experiment in Self Reliance.

Click here for a list of VITA sites in Forsyth County and their schedules, as well as a list of what you should bring to the VITA site. 

The VITA program is a real asset to low income working families, and it can help them save money by not using a paid preparer. We hope you will take advantage of this great resource in our community!

The Earned Income Tax Credit (EITC)

With tax time quickly approaching, it is important for families to be aware of the benefits that are available to them, particularly the Earned Income Tax Credit. The EITC is a tax benefit for low to moderate income working people. It helps to offset taxes, to supplement very low wages, and to provide a work incentive.

Besides offsetting taxes, workers can also get cash back through the EITC refund. Workers who qualify for the EITC and claim it on their federal tax return can receive a refund check from the IRS even if their earnings were too small to owe income tax.

Workers with one child in their home and an income of less than $36,052 (or $41,132 for married workers) in 2011 could receive a credit of up to $3,094. The amount of the credit increases with the number of children living in the home. Workers between the ages of 25 and 64 who were not raising children in the home, and had an income below $13,660 (or $18,740 for married workers) could receive a credit up to $464. This credit can be a huge help to working families!

To get the EITC, workers with a “qualifying child” must file either Form 1040 or 1040A as well as Schedule EIC. Married workers must file a joint return. Workers who were not raising a “qualifying child” can file any tax form, even the 1040EZ.

Our partner Experiment in Self Reliance, hosts the EITC program in our community. You can also participate in National EITC Day which will be held January 27, 2012 at Career Connections and Prosperity Center on Waughtown St. Hope to see you there!

Improving Housing Market in 2012?

As we kick off a new year, there is optimism that 2012 may mark the beginning of a turn for the better in the housing market. Tom Lawler, an independent consultant, sees potential in the continued dearth of newly built homes, a slowly rebounding job market, and a population in need of housing. Lawler is not alone. Goldman Sachs has stated that the housing-price bottom is in sight and they expect a 30 percent gain in home prices over the next decade.

The real estate market is anticipating an increase in housing demand for 2012. More specifically, Lawler is predicting an increase in headship rates, which is defined as the number of people who qualify as the head of household. Since 2005, the number of new households formed each year has dropped to less than one million. This is partly due to the fact that young adults have especially been hit by the poor job market, making them more hesitant to become heads of household. Young people have been staying in school longer, moving back in with their parents, or living with roommates. Since these are not permanent housing situations, it suggests an emerging, pent up demand for housing, Ultimately these people will be forming their own households.

The Joint Center for Housing Studies is also optimistic. It projects total household growth at about 12.5 million to 14.8 million over the next decade.

When Americans begin to look for housing, the market will be further impacted by the fact that there are relatively fewer new homes under construction. As a result, people will turn to the stock of existing homes, which will help to clear the market by purchasing homes that are now sitting empty.

Another factor in housing demand is the job market. The number of job layoffs has been steadily declining. As more people find work, they will be more able to qualify for a mortgage and more likely to purchase a home.

Glimmers of hope like this are creating optimism among those involved in the housing industry. For more information, read Loren Berlin’s article “Will Housing Market Finally Rebound in 2012?” published in The Huffington Post.