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Free tax preparation program boosts families and economy

Post Date:04/11/2018 9:00 AM

When Lua Maloney showed up at Tempe’s free tax preparation site, she expected to walk out with a completed return and another thing checked off her to-do list.   

She left with a windfall – and the first step toward a new future. 

Thanks to the services at the VITA tax site, Maloney received an unexpected $5,000 refund that she put toward bills and a savings account. She also purchased her first U.S. Savings Bond as part of a special program at the site.

For the single mom of two working a part-time retail job, it was a life-changing outcome. 

Maloney became a regular client and in the past 10 years, has added savings bonds and used refunds for things like purchasing a used car and creating an emergency fund.  

"The service was great,” said Maloney, now a full-time administrative assistant at Mesa Community College.  “It helped us so much.”

Help for qualifying taxpayers

Sponsored by the Internal Revenue Service, Volunteer Income Tax Assistance (VITA) tax sites serve low- to moderate-income taxpayers nationwide. The sites, operated in partnership with nonprofits and others, are credited with helping taxpayers file millions of returns each year. 

The Tempe Community Council (TCC) opened its VITA tax site in 2001 as part of the organization’s mission to address various human service needs in the city. The tax program is open to individuals and couples making less than $54,000 a year, as well as senior citizens and people with disabilities.

Tempe’s tax site has grown each year, boosting the number of clients, tax returns and refunds. The effort adds millions of dollars annually to the local economy, said Diane Watkins, the Tempe VITA program coordinator. 

For the 2016 tax year, the site served roughly 1,800 clients and generated more than $2.6 million in refunds. The site is on track to meet or exceed those numbers for the 2017 tax year.

Tempe’s tax site focuses on reaching those who may not be taking advantage of the Earned Income Credit (EIC), a refundable tax credit for qualifying low- to moderate-income people who work. That credit can equal a refund in the thousands.

“That is how some families survive,” Watkins said. “Their income during the year is really not able to sustain them. With this chunk of money, they may be able to buy a car or pay off bills that they might have accrued during the year or buy their kids school clothes.”

To reach even more clients, the tax site partners with Arizona State University to prepare returns for international students and participates in My Free Taxes, an online IRS program that allows clients to prepare their own returns.

Funding for the Tempe tax site comes from the IRS, the City of Tempe’s Agency Review program, and other sources.

Changing lives

The VITA tax site operates three days a week at Gracie’s Village, 1540 E. Apache Blvd. The last day to receive free assistance at the site is April 14 (the official federal filing deadline is April 17). With that deadline nearing, the Tempe site has been buzzing with individuals and families needing tax help.

On a recent Wednesday, roughly two dozen people sat at tables poring over documents with tax preparers while another two dozen waited their turns. It was a scene that has played out year after year, with success stories attached to tax returns like W-2s.

One story in particular stands out for Watkins: A single mom was banking on a refund for a down payment on a new car because her current vehicle wasn’t working. After discovering she was eligible for the EIC that tax year – and could amend the previous year’s return to claim the credit – she had enough money to purchase a car outright. 

“The impact was just phenomenal,” Watkins said.

For Kathy Adams, the tax site has had a similar impact. A regular client for about nine years, she asks for the same preparer every year and now her daughter is a client too.

“They’re friends and very, very knowledgeable,” she said. “I just feel like everybody knows what they’re doing. And the bonus is I get a refund.”

“Being a widow on a limited income, it’s kind of a rainy-day fund for me,” she said.

The road ahead

Tempe’s tax site is unique in that it combines tax preparation with asset education.  Volunteer asset educators encourage clients to save through the savings bond program and connect them with community resources, everything from pet food assistance to job fairs to utility discount programs.

The education can set clients on an entirely new path. That’s what happened to Maloney, the longtime client.  With the tax prep and asset education, she built up savings, found affordable housing, bought her car, and more. The savings bonds she purchased so many years ago now help finance her oldest child’s college education.

Maloney, who volunteers at the tax site as a way of giving back, spreads the word about the free program any chance she gets.

“I always tell people, ‘If you meet the requirements, don’t pay for that service. Come here!’,” she said.

The Tempe VITA tax site is open 9 a.m. – 12 p.m. on Saturdays and 5 – 7 p.m. Wednesdays and Thursdays. The free service is available to qualifying individuals and families on a walk-in basis. The last day to receive tax preparation help is Saturday, April 14. For information, visit Tempe Community Council.

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