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March 3, 2015
Every year like clockwork, we wait for our W-2s, 1099s, and all other manner of forms so that we can file our taxes, and if we're lucky, we will break even or get a refund. Everybody has to do it, so it shouldn't be that big of a deal, right? Not necessarily.
For many people, tax season can be very stressful.
When you're living under the federal poverty level ($24,250 total annual income for a family of 4 in 2015), having to pay taxes or even for someone to prepare your taxes, it can be a huge financial burden and take away from your ability to pay rent and utilities, buy food, and pay for other basic needs. Because of this, a lot of these families don't file taxes or try to do it themselves and end up missing out on valuable tax credits.
The good news is there are programs out there to help alleviate this stress. Many Coloradoans who make less than $57,000 a year are eligible for free tax preparation.
The VITA/TCE tax preparation sites can prepare Forms 1040 and 1040NR, Schedules A, B, C-EZ, D, EIC, R, and some E, Form 2441 (Child and Dependent Care Expenses), Form 8863 (Education Credits), and Form 8812 (Child Tax Credit) among others. Additionally, the tax sites offer help with the tax side of the Affordable Care Act, self-preparation e-file assistance using Facilitated Self Assistance and IRS Free File, and assistance with FAFSA preparation.
The VITA/TCE volunteers are also knowledgeable about tax credits including the Earned Income Tax Credit (EITC) and Child Tax Credit. The EITC is one of the most commonly missed tax credits and every year it is estimated that 50,000 working Coloradoans don't receive it even though they are eligible.
Tax credits are often used to pay for necessities such as utilities, food, housing, transportation, education, and health care. Each year, Colorado taxpayers receive hundreds of millions of dollars in EITC refunds. That's a lot of money that can be used to help working families and also help stimulate our economy.
On a bigger scale, programs like the EITC are associated with a boost in children's school readiness and achievement, health outcomes, and ultimately future economic success, according to the Piton Foundation. By addressing the needs in these areas, people are more likely to break the cycle of poverty and help build a better overall community. If a family is able to meet basic needs, children are better able to focus in school, which allows them to learn more and grow up to be contributing members of society.
Make sure to tell others who may qualify and help them keep their hard-earned money.
Copyright 2015 United Way of Larimer County