There are many tax credits and other benefits available to low- and moderate-income Michigan residents, but they can only be claimed by filing an income tax return. For those of us who are not accountants, this can be complicated or even overwhelming. At Volunteer Income Tax Assistance (VITA) sites, trained and certified volunteers use IRS-issued software to prepare the returns, and each return undergoes a quality review before being submitted. Taxpayers can rest assured that their returns are complete and accurate, and the service is free.
Every Monday after work, I head over to the former elementary school now occupied by NorthWest Initiative, a CEDAM member. For the next three hours, I work with individuals and families who had under $50,000 in income for 2009. We review their situations, I enter their information into the tax preparation software, and by the time they leave we have completed their federal, state, and local income tax returns. The federal and state returns are filed electronically, and we put their signed local returns in an addressed envelope ready to be mailed.
The tax benefits my clients receive vary by income and life situation. A few people own their home and can deduct their mortgage interest and real estate taxes, leading to a larger return. Working lower-income families are eligible for the federal and state Earned Income Tax Credit, which can put thousands of dollars back in their pockets. Students may receive an American Opportunity credit based on the tuition they’ve paid. Those who paid taxes on their unemployment benefits can get back the taxes on the first $2400 (federal) and $600 (state). Almost everyone receives the new Making Work Pay credit, which is up to $400. Low-income homeowners and renters who paid for heating can receive the Michigan Home Heating Credit.
If you hate filling out forms, this probably isn’t your ideal volunteer opportunity. However, if you are careful, don’t mind data entry, and like to meet people, VITA could be perfect for you, and volunteers are desperately needed. It’s a great feeling to tell someone that they will soon be receiving hundreds or thousands of dollars to help pay off debts, pay bills, or save for future goals.
Resources on VITA and Tax Benefits
- Call 2-1-1 in most areas of Michigan to schedule an appointment.
- For a great resource on available benefits, download Money Back in Michigan, an up-to-date, comprehensive brochure published by the Michigan League for Human Services.
- File on your own taxes for free at www.icanefile.com
- Learn more about VITA sites and find one near you.