NorCalSavant

In an earlier post I discussed the options available for tax preparation and electronic filing using a computer.  What if someone you know does not want to use a computer to file their return?  What if they needed to ask a question or clarify something? What kind of help is available for them?

Turns out, there is live telephone and face-to-face tax preparation and filing help available from a variety of sources.  Here is a list of what I found out.  Many of these IRS sponsored programs are geared toward low to moderate income filers and the elderly.

Live Telephone Assistance

IRS has live telephone assistance available for individual filers at 800-829-1040.  The hours of operation are: Monday – Friday, 7:00 a.m. – 10:00 p.m. local time (Alaska & Hawaii follow Pacific Time).  Telephone assistance numbers for other filers including people with hearing impairments, and businesses are available on this IRS web page.

Taxpayer Assistance Centers

Face-to-face personal tax help can be obtained at the IRS Taxpayer Assistance Centers (TAC).  You can search for the nearest TAC according to the ZIP code at the TAC Site Search web page.  You can generally walk in to these centers for help.   You can also schedule an appointment for a complicated return.  The Centers are closed on federal holidays.

Volunteer Income Tax Assistance Program (VITA)

The VITA Program includes certified volunteers who have been trained to help prepare basic tax returns.  It serves moderate-income taxpayers (with less than $42,000 in income), seniors and the military.  VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations.  Free electronic filing of the return in addition to the free tax preparation help is also available at many VITA sites.  To locate the nearest VITA site you call IRS at 800-829-1040.

Tax Counseling for the Elderly (TCE)

This is a similar IRS sponsored program for those age 60 and older.  Volunteers provide free tax counseling and basic income tax return preparation.  More information on TCE is available at 800-829-1040.

AARP offers its Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season as part of the TCE program.  Certified volunteer counselors help people of low-to-middle income and those age 60 and older prepare and file basic returns for free.  The nearest AARP Tax-Aide site can be located by calling 888-227-7669 or by visiting AARP’s web page.  Many of these AARP Tax-Aide sites are not walk in sites but are operated on an appointment basis.

The IRS web page here includes the details of information and documents necessary at the VITA/TCE site for tax return preparation and filing:

• Proof of identification

• Social Security Cards for you, your spouse and dependents and/or a Social Security Number verification letter issued by the Social Security Administration

• Birth dates for you, your spouse and dependents on the tax return

• Current year’s tax package if you received one

• Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers

• Interest and dividend statements from banks (Forms 1099)

• A copy of last year’s Federal and State returns if available

• Bank Routing Numbers and Account Numbers for Direct Deposit

• Total paid for day care provider and the day care provider’s tax identifying number (the provider’s Social Security Number or the provider’s business Employer Identification Number)

• To file taxes electronically on a married filing joint tax return, both spouses must be present to sign the required forms.

Earned Income Tax Credit

The federal Earned Income Tax Credit or the EITC is a tax benefit for low to moderate income working individuals and families.  Congress first passed EITC legislation in 1975 to partly offset the burden of Social Security taxes on low income families and to provide an incentive to work.  EITC is a refundable tax credit.  So, if the calculated taxes are lower than the credit, the part of credit remaining after paying taxes owed is refunded to the tax filer, resulting in a net payment to the tax filer.

Unfortunately, it is estimated that 15 to 25 percent eligible households do not claim the EITC they are entitled to.  That is leaving thousands of dollars on the table.  It is inexcusable.  Hope you don’t let that happen to anybody you know.

According to the IRS web page to qualify for EITC, both Earned income and adjusted gross income (AGI) must each be less than:

• $38,646 ($41,646 married filing jointly) with two or more qualifying children;

• $33,995 ($36,995 married filing jointly) with one qualifying child;

• $12,880 ($15,880 married filing jointly) with no qualifying children.

The maximum credit for 2008 are:

• $4,824 with two or more qualifying children;

• $2,917 with one qualifying child;

• $438 with no qualifying children.

Also, to qualify for EITC the investment income for 2008 must be $2,950 or less.

You can use the EITC Assistant on the IRS web site to find out if you are eligible for EITC.  You can also get personal help from IRS at 170 locations nationwide to prepare your income taxes if you are eligible for EITC.  You can get a list of these offices at this IRS web page.  For additional help, these offices will also be open during Saturday, February 21 from 9:00 a.m. until 2:00 p.m.

Many states and local cities/districts have their own Earned Income Credits.  These state credits can vary from 15 to 30% of the federal credit.  So, please do check if your state/locality offers additional EIC.

Recovery Rebate Credit

Finally, it seems like there is a lot of confusion about last year’s economic stimulus payment and the recovery rebate credit.  Someone I met the other day said to me that last year’s stimulus was taxable income and had to be entered on the tax forms.  I was surprised and decided to check it out.

IRS acknowledges that there is some confusion about these issues.  Actually, the economic stimulus payment received last year is not a taxable income.  It should not be reported as income at all.

The economic stimulus payment was for 2008, but was handed out based on the 2007 tax returns.  The recovery rebate credit is the IRS vehicle to make whole those filers who were shortchanged.  In other words if somebody did not receive the payment or received less than full payment ($600 per taxpayer or $1,200 if married filing jointly) but should have, then they can do so now with their 2008 taxes.

You may also be eligible for it if your tax status has changed in 2008 compared to 2007.  For example, you were a dependent on someone else’s tax return in 2007 but cannot be claimed as a dependent on any return in 2008.  Or your family added a qualifying child in 2008.

You can use this IRS web page to find out your 2008 stimulus payment, if you don’t remember the amount.  You can also call the IRS at 1-866-234-2942 to find it out.  The IRS is planning to make available a recovery rebate credit calculator at this IRS web page in late February to help calculate the actual credit to use on the return.  Or, you can use the worksheet in Form 1040 instruction booklet to figure out the credit by hand.   For most filers the credit is likely to be zero.

So, happy filing and credit claiming.  If you know any other often overlooked tax benefits, please leave a comment.

Related posts:

1. Home Buyer Tax Credits 2009 Act 2 I am back to the blog after spending months being extremely busy looking to buy a house.  We finally bought...
2. California — Welcome to One of the Highest Sales Tax Rate in the Country, But No Sales Tax Holidays With the ongoing recession things have not been looking too good for California’s budget.  With politicians entrenched in Legislature and...
3. FICO’s MortgageReliefOnline.com for Free Credit Counseling and Assistance with Making Home Affordable Program In my earlier post here, I had discussed the details of President Obama’s Making Home Affordable Program.  The program has...
4. Ben Bernanke’s Credit Easing — Mortgage Rates at Historic Lows, but the Credit Crunch Continues In his address at the 2009 Credit Markets Symposium in Charlotte, North Carolina, Federal Reserve Chairman Ben Bernanke said on...