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Dear Nida Saleem
As we all know, tax season is upon us.
Every year during tax time, I become very upset thinking about how low-income families in our community are exploited by tax preparation companies. Why does this concern me as director of a public health agency? Because when our neighbors have to spend unnecessarily on this service, they have less money available for required health care, home heating, warm clothes for their children and nutritious food.
Did you know that a national company that prepares tax forms, with a number of offices in the Capital Region, charges $84 to complete a simple tax return. And that is if you have only one W-2 form. If you have more than one job, the cost goes up.
Further, if you take a loan from the tax preparation company against your refund and want the check that day, the interest rate is 56%! If you can wait 1 - 2 days, the rate is 30%. In a 2005 study, the Center for Responsible Lending found that $1.57 billion was lost to low-income families from their Earned Income Credits in one year because of these predatory loans.
What can you do to help your clients receive every tax benefit they are entitled to?
- Refer them to one of the free tax preparation services in the Capital Region.
- Remind them that they can get a "refund," even if they don't owe any taxes, through the Earned Income Credit program. If they have children and/or other dependents, they may also be eligible for the Child Tax Credit and the Child and Dependent Care Credit.
- Let them know that non-custodial parents can get an Earned Income Credit on their New York State taxes if they make support payments through a Support Collection Unit.
- If they did not file a return for 2007 because they did not owe taxes, they did not receive a stimulus payment in 2008. They can apply now to receive this payment by filing their 2008 taxes.
To locate a free tax preparation site in your area, please refer to the following list. You may also call the Human Services Hotline Number (518) 694-0464.
Lucy Pulitzer
Executive Director
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