Taxes

This post is the sixth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. 

Taxes. Just saying the word can make people groan. But the reality is, this time of year can actually bring good news to low- and moderate-income families all over the country. Federal tax credits such as the Child and Dependent Care Tax Credit (worth up to $2,100), the Child Tax Credit (worth up to $1,000 per child), and the Earned Income Tax Credit (worth up to $5,891), can give a boost to families whose incomes are too low to owe taxes. 

One family in Dallas took advantage of free tax preparation at a United Way VITA site and was rewarded for their effort. They qualified for the federal EITC and received nearly a $6,000 refund! Less than two weeks later, the refund was in the family's bank account and helped to pay for things that the family really needed: children's clothes, a crib, and a new car.  Read more »

Written by Susanna Birdsong, former NWLC legal intern

This post is the fifth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

On my first afternoon as a Volunteer Income Tax Assistance (VITA) site volunteer, I settled in to a computer station in the basement of D.C.’s downtown library to help people file their tax returns.  “And just one final question, if you don’t mind me asking,” I asked a mother as she smoothed hair out of her drowsy daughter’s face,  “how are you planning to use your tax refund this year?”  She smiled, and answered that she was planning on using the money to pay her bills.  “Every year, it’s what keeps us going,” she said. 

As a tax preparer with the local Earned Income Tax Credit (EITC) Campaign, this is one of the voluntary questions that I ask low-income taxpayers as I help them complete their tax returns.  The most frequent answer (by far) is the one this mom gave to me—the money’s going to pay the bills.  Read more »

This post is the fourth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

Not to make you panic, but there’s about a month left before the April 15 tax-filing deadline. State and federal income tax refunds can provide a significant economic boost for families. If you work with families (including your own!), you should know about some of the ways that families can use their tax refunds to build up their economic security, other than paying bills or making long-deferred purchases. If families file their taxes electronically and choose direct deposit for their refunds, they can:

• Put some of their refund in up to three different accounts, including checking and savings accounts, but also passbook savings, IDAs, IRAs, HSAs, Archer MSAs, and Coverdell education savings accounts. That means that they can save not just for a rainy day, but specifically for retirement, medical costs, or educational expenses.
• Buy a U.S. Savings Bond worth up to $5,000.
• Families can choose how much to put in the different accounts or the Savings Bond.

Today House Budget Chairman Paul Ryan (R-WI) released his vision for the next ten years. Despite having a section entitled "Fairness Restored," Ryan’s budget does anything but put forward a fair and equitable plan.

Chairman Ryan’s plan balances the budget on the backs of vulnerable women and their families. It would:

• Cut the funding available for programs like Head Start, child care, K-12 education, job training, and domestic violence prevention.
• Cut Medicaid and turn it into a block grant, allowing states to restrict eligibility and eliminate benefits. About two-thirds of adult Medicaid beneficiaries are women.
• Repeal the Affordable Care Act, eliminating the Medicaid expansions critical for low-income families, tax credits to help moderate-income families purchase health insurance, help with the cost of prescription drugs in Medicare and preventive health care services (including contraceptive services), and protections against discriminatory insurance company practices.

This post is the third in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts. Read more »

This post is the second in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

We’ve all seen it – the person on the corner dressed as some patriotic character spinning around a “HUGE TAX REFUND” sign. Since it’s the taxpayer (YOU) that is ultimately responsible for all the information on your tax return, promises of huge tax refunds are sometimes too good to be true. Here are some tips to help you avoid scams.  

1. IRS representatives do not initiate taxpayer communication by going go door-to-door or sending emails. If someone knocks on your door or sends you an email claiming to be a helpful representative from the IRS, do not give them your Social Security Number or any private financial information.  
2. You must provide proof of eligibility for any tax credits you are going to claim. Some preparers claim that if you pay them a fee, they will get you these credits without proof – they can’t.
3. The Economic Recovery Credit Program, Making Work Pay, and the Recovery Rebate Credit are EXPIRED programs – anyone that says they will get you these credits is trying to pull a fast one.

This post is the first in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.

It’s February, which means tax season is in full swing (even if you are in denial). For those who haven’t yet filed their 2012 taxes, I offer an item for your consideration prior to the April 15 deadline. Even those families who have already filed their tax returns for the last tax year (and hopefully claimed tax credits for which they were eligible) shouldn’t stop reading here.

April 15 isn’t just the deadline for filing your 2012 tax return without an extension. It’s the deadline for filing past tax returns! Specifically, it is the deadline for the nearly one million individuals and families who failed to file a 2009 tax return. Practically speaking, this means you can go back in time three years and get a do-over on your taxes. Read more »

What a night, and what a speech!

On Tuesday, President Obama laid out an important economic agenda for women and families in his State of the Union address — expanding early education opportunities, advancing fair tax and budget policies, increasing the federal minimum wage, and passing both the Paycheck Fairness Act and the Violence Against Women Act.

This is a full and impressive agenda for President Obama's second term. But we're up for the challenge and we hope you are, too!

Please join us in thanking President Obama for his commitment to women and their families. Your voice will send a strong signal to the White House that it's on the right track.

What's our take on all of these key issues?

• Expanding Early Education Opportunities — President Obama's early childhood initiative would expand access to critical early learning opportunities for millions of preschool age and young children across the country. This would help many low- and middle-income women and their families who are struggling to afford the early learning opportunities that put their children on a path to success.
• Advancing Fair Tax and Budget Policies — President Obama called on Congress to pass a budget that replaces reckless cuts with smart savings and wise investments in our future. This is especially important to women, because millions of hard-working women are struggling to lift their families out of poverty and cuts in funding for public services have cost women hundreds of thousands of jobs. We also need a tax system that fairly raises the revenue required to make these wise investments and stave off deep cuts to Medicare, Medicaid, Social Security, and other programs women and their families count on.

Kansas governor Sam Brownback wants to eliminate the state income tax. Yes, you read that correctly. The governor wants to join the small list of states that have chosen to eliminate a crucial revenue stream. In 2012, Governor Brownback sharply cut income tax rates to the tune of $850 million dollars in lost revenue for the coming fiscal year. Amid those big tax cuts that primarily benefit high-earners, he found time to eliminate tax provisions that benefit low-income Kansans, including a refund of sales tax paid on food and a state tax credit for child and dependent care expenses.

Consider these numbers: The poorest 20 percent of Kansans will spend, on average, an additional $148 per year on taxes because of the repeal of tax provisions aimed at low-income people. This is a significant blow to women and female-headed families in Kansas,  13.8 percent and 40.9 percent of whom live in poverty. Meanwhile, the richest one percent of Kansans will save an average of $21,087 per year on their state income taxes. As one Kansas state legislator told the New York Times, this tax package is “Robin Hood in reverse.” Read more »

“Will there be a deal to avoid the fiscal cliff?”

That was the question that rang out for months from policy makers, journalists, and concerned onlookers everywhere. And in the first few days of January, the American Taxpayer Relief Act was signed into law, resolving several of the tax and budget issues known as the “fiscal cliff.” Among other things, it requires the very wealthiest to pay a fairer share of taxes, extends tax credits that benefit hardworking families for five years, extends unemployment insurance benefits for a year, and delays across-the-board spending cuts for two months.

However, another series of fiscal showdowns are looming. Read more »