Many people can afford a little help in preparing and filing their tax returns. But for some, paying for such assistance would be an added hardship at tax time. Iowa State University Extension and Outreach supports the Volunteer Income Tax Assistance program to help Iowans with lower incomes save money on their tax return preparation.
ISU Extension and Outreach works with community partners throughout the state to recruit and train volunteers for VITA, a program of the Internal Revenue Service. These volunteers provide free tax preparation and electronic filing for low- and moderate-income families, says Jeannette Mukayisire, a human sciences specialist in family finance with ISU Extension and Outreach.
These volunteers can prepare tax returns accurately and help taxpayers save money. They are qualified to deal with most ordinary types of income, deductions and tax credits, Mukayisire said.
One credit for which low- or moderate-income Iowans may qualify is the Earned Income Tax Credit. Enacted in 1975, the EITC was designed as a refundable tax credit for tax filers with children. According to the Center on Budget and Policy Priorities, a nonpartisan research and policy institute, 70,000 Iowans were lifted out of poverty by the refundable tax credits, including 39,000 children, each year during 2011 to 2013. As a result, the federal EITC put about $477 million into the pockets of Iowa families who claimed it in 2014.
“Families are likely to spend EITC-generated income in many ways. Some may use the income for making ends meet, by paying bills and other household needs, while others may use it to pay debt or for saving,” Mukayisire said.
“The ripple effect of EITC income flow makes a substantial economic impact for families in their local communities. It also may reduce stress and increase well-being for these families and their children,” Mukayisire said.
“The cost of commercial tax preparation can take up a substantial portion of the EITC benefits. I encourage Iowans who meet the income guidelines to contact a VITA site for tax help so they can keep all the EITC for which they qualify,” Mukayisire said.
Source: Iowa State University Extension