A little extra money from your tax return could make paying bills easier and starting a savings account possible. What could the potential impact be if you found out that you may be eligible to get as much as $6,244 from both the state and IRS?
Have you heard of the Earned Income Tax Credit (EITC)? The EITC is designed to help low-to-moderate income people-specifically those who earned less than $50,000 from wages, self-employment or farming last year-reduce the amount that they owe in taxes and potentially put more money back into their pockets. The catch is that you must file a federal income tax return claiming the credit in order to receive it, even if you are otherwise not required to file. Providing huge benefits for workers, it may seem like a no-brainer to try and take advantage of this tax credit. However, the IRS estimates that every year, one out of every five eligible families fails to claim the EITC.
The EITC can be complex to understand, but it is important to make sure that you and your clients know about this valuable credit, and that other credits like the statewide Michigan EITC program. The amount of tax credit is based on several factors including the amount of income and number of qualifying children (workers without children also may qualify) and ranges from a combined state and federal refund between $503 and $6244. Visit irs.gov more more information about the EITC or other tax credits that may be available to you.
If preparing your tax return is a struggle, or even if you are simply not sure if you are maximizing your potential refund, there are resources out there to help. Taxpayers with incomes $51,000 or less also qualify to have their income taxes prepared for free by an IRS trained and certified volunteer through the volunteer income tax assistance (VITA) program. These volunteers are IRS-certified and help people prepare their taxes, provide education about various opportunities to maximize a return and are found within communities throughout Michigan. A great place to start is to visit MichiganFreeTaxHelp.org or call 2-1-1, which describes VITA locations near to you, how to best organize your materials to maximize your visit for the best use your time and even schedule an appointment.
While VITA sites offer tax preparation and education services throughout tax season, Show Me the Money Day began in 2011 in Lansing and Flint through partnerships with local community development organizations, financial institutions and community action agencies as a way to go a step further. On the fourth Saturday in January each year, a spot within the community becomes a centralized host where all are welcome to come learn more about free tax service, financial tips and tricks to help save money and to be connected with quality, low-cost (or no cost) financial service providers in their community. This year, nine communities across Michigan are hosting Show Me the Money Day events. Visit ShowMetheMoneyDay.org to find locations and the services available specific to your community.
With all of these opportunities, it’s like cash in your pocket and education at your fingertips. Let’s take advantage of the opportunity to grow savings accounts across Michigan through partnerships, collaboration and connection to resources. If you are interested in hosting a Show Me the Money Day event in 2014, it is not too early to start planning. Email firstname.lastname@example.org with any questions and for information on how to get started.