Don't Mess With Taxes

Photo by Elissa Garcia on Unsplash

If you're ever tempted to utter "these kids today" with a sigh and head shake, then take a few minutes to read about some California teenagers who are making a big tax difference in their community.

The Rancho Cucamonga high school students come back to campus every Saturday during tax filing season to run a Volunteer Income Tax Assistance (VITA) clinic.

The students, many of whom are planning on financial careers once they graduate high school and college, filled out 250+/- Internal Revenue Service returns last year for taxpayers in the city just east of Los Angeles.

The tax training also helps the students, and their families.

"Many of them now look over their parents' shoulders to make sure they file their tax returns on time and get every deduction," writes New York Times financial columnist Ron Lieber.

One of the VITA volunteers also did his own taxes for the first time, telling Lieber, "I work at Taco Bell. I got an $8 refund. Which is $8 I can buy more candy with."

Locally provided tax help nationwide: While the tender age of the Rancho Cucamonga VITA clinic might be unusual, the operation itself is just one of thousands of sites across the United States that, like its companion community tax help operation Tax Counseling for the Elderly (TCE), are staffed by volunteers who help eligible taxpayers prepare and e-file their returns for little or no cost.

VITA and TCE sites have been around for more than 50 years. The clinics typically are sponsored by community and nonprofit groups at locations that are convenient for local taxpayers to find and get to, like the southern California high school in the NYT story.

Volunteers in many locations are able to help taxpayers whose first language isn't English.

And since taxes and people's money are involved, the sponsoring groups and IRS also want to make sure the VITA and TCE preparers know what they are doing.

The California high school students, like VITA and TCE volunteers of all ages, had to pass IRS sanctioned tax law training that meets or exceeds the tax agency's standards. This training includes guidance on maintaining the privacy and confidentiality of all taxpayer information. You can see the curricula in IRS Publication 6744, the VITA/TCE Volunteer Assistor's Test/Retest.

In addition, the IRS requires a quality review check for every return prepared at a VITA/TCE site prior to filing.

Qualifying for VITA, TCE help: Like the volunteers, the taxpayers who come to a VITA clinic for help also must meet some requirements.

The first is income. The earnings threshold typically is adjusted each year. Generally, to qualify for VITA help this year, you must make $64,000 or less.

VITA assistance also is available to individuals with disabilities, and taxpayers whose native language is not English.

TCE, the companion program to VITA, also offers free tax prep and filing assistance to taxpayers who are age 60 and older. As you might expect, TCE staff specialize in tax questions about pensions and retirement-related issues.

Some VITA and TCE sites also provide help with state tax returns.

A sort-of DIY option, too: Some of the program sites also offer a less hands-on assistance option. They give filers the option to prepare their own basic federal and state tax returns for free at the locations, using web-based tax preparation software.

How is this do-it-yourself option at a VITA or TCE location different from Free File? At one of the volunteer locations, you do your taxes online, but if you run into a problem someone is there to help guide you through the process.

Look for the "Self-Prep" notation in the location listings if you're interested in trying to do your taxes yourself, but like the idea of expert back-stopping if you have trouble or questions.

Finding VITA or TCE sites: Now about those tax help locations.

VITA and TCE sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations across the country. You can locate the VITA or TCE site nearest you by using the IRS' VITA Locator Tool or calling toll-free (800) 906-9887.

When looking for a TCE site, keep in mind that a majority of the TCE sites are operated by the AARP Foundation's Tax Aide program. To locate the nearest AARP TCE Tax-Aide nearest you, use the AARP Site Locator Tool, which is updated regularly from the start of tax season through April. Or you can call, again toll-free, (888) 227-7669.

For mobile device users, you IRS2Go mobile app will help you find a site near you.

With a couple of clicks on my laptop, I found 22 VITA and 40 TCE locations within 50 miles of my house. Hey, I'm a Texan, specifically a West Texan. We're used to driving longer distances. But if you don't like hitting the road, you can search for sites as close as 5 miles from your home.

Pre-help preparation: You also need to be aware of the pre-VITA/TCE site visit requirements related to your taxes. Specifically, you must do some pre-filing prep work.

To ensure that your tax return can be completed accurately, all volunteer tax filing help sites ask that you bring with you:

• Proof of identification, such as a photo ID
• Social Security cards or Individual Taxpayer Identification notices/cards for you, your spouse, and any dependents
• Birth dates for you, your spouse, and any dependents you will claim on the return
• Proof of foreign status if applying for ITIN
• All W-2 and 1099 forms
• Any other information for other income not reported on a 1099
• Information supporting all deductions and credits
• Total paid to day care provider and the care giver's tax ID number
• Affordable Care Act documents, including Forms 1095-A, B or C or a Health Insurance Exemption Certificate, if received  
• Proof of an account at a bank or other financial institution for direct deposit of refund
• A copy of last year's tax return, if applicable
• For filing of prior year returns, copies of income transcripts from IRS and, if applicable, your state filings.

Also note that if you're married and you and your spouse want to file a joint return, both of you must come to the VITA or TCE site.

Lots, but not total, tax help: Finally, remember that VITA and TCE volunteers focus on helping a broad base of taxpayers. This means they work on returns that cover more basic filing issues.

So that necessarily means that some, particularly more complex, tax areas are not addressed at VITA and TCE sites. Returns that involve the following will not be worked on at the sites:

• Schedule C sole proprietor returns with losses, depreciation, or business use of home
• Complicated Schedule D filings, i.e., capital gains and losses
• Form SS-5, request for Social Security Number
• Form 8606, reporting of non-deductible IRA contributions
• Form 8814, filed to report a child's investment income taxed at the parent's tax rate, aka the kiddie tax
• Form SS-8, determination of worker status for purposes of federal employment taxes and income tax withholding
• Parts 4 and 5 of Form 8962, premium tax credits related to the Affordable Care Act (Obamacare)

You can find more on the type of tax issues VITA and TCE will and won't tackle, as well as a reminder of the documents you need to bring, in IRS Publication 3676-B.

You also might find these items of interest:

• 6 tax credits for lower-to-middle income taxpayers
• IRS TACs open for walk-in assistance on select Saturdays in March, April, and May
• Don't overlook the EITC, a valuable refundable tax credit that often goes unclaimed

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