, March 4th, 2009
Lauren, a College Station resident, was shocked to learn that she was being laid-off from her secretarial position a few weeks ago. To make matters worse, her car is in imminent need of repairs and she is newly divorced, complicating the already bleak financial situation. She’s worried about finding another job when so many businesses are making cutbacks and says she’s really nervous about her future.
Tax season is one more stressor.
It is Lauren and others like her in the community that motivate Juan Reyes ’09, a student at Mays Business School at Texas A&M University, who is volunteering through the United Way of Brazos Valley to provide free tax preparation and filing assistance to low-income people in the area. “I’m big into helping in the community,” said Reyes, a corps member. “Giving back is important to me, and this is also a great opportunity to apply the stuff I’m learning.”
“It’s very expensive to have your taxes done,” he said, noting that for those expecting only a small return, the cost of the tax preparation can be more than the refund check. “It only takes us 20 to 30 minutes and it isn’t all that hard. People are so grateful for this service.”
That was certainly the case for Lauren, who is now watching her spending very closely. She says the money she’s been able to save by not having to pay for tax preparation will be used for vital things, such as food, gas, and housing. “I think it’s great that they’re willing to help people in need,” she said with tears glistening. “It’s so encouraging to know that there are still people out there that care, that are willing to help you.”
Reyes’ volunteer hours are more than just a good deed: he’s getting class credit as well. He is one of 12 students participating in the accounting course, “Special Topics in Taxâ€”Federal Taxation of Low Income Filers: Socio-Economic Forces,” which is being offered for the first time at Mays. The course objective is helping students understand federal income tax legislation, its impact on low-income filers, and the socio-economic forces at work. Learning takes place in the classroom, but the majority of the content is mastered through community service: each student is required to log 54 volunteer hours between February and mid-April helping those that make $50,000 or less to file their taxes.
In addition to the volunteer hours, the students spend eight hours learning to use tax preparation software with additional time studying tax law to become certified by the IRS for the Volunteer Income Tax Assistance (VITA) program. The students from Mays are traveling to nearby communities as well, such as Navasota, Brenham, Centerville, Sanderson Farms, Somerville, and Madisonville. For additional practice, Reyes and classmates also spent several hours on the A&M campus helping fellow students file.
The course isn’t entirely about tax law. It also focuses on issues facing low-income families and individuals. In classroom sessions, experts from the community and from the government speak about topics such as low-income housing, hunger, public policy, economic development, federal tax administration, and community volunteer services.
“This class really makes me appreciate all the opportunities I’ve been given, like school,” said Reyes, who is considering law school or a graduate program in finance when he finishes his degree in May.
Adam Myers, instructor for the course, says that working low- to moderate-income filers who may not otherwise be required to file a tax return are encouraged to file a return to receive the benefits of the Earned Income Tax Credit (EITC). Filers who qualify for the EITC may receive cash from a refund in excess of the amount of tax they owe. The IRS estimates $5,665,904 in 2007 EITC funds were unclaimed in Brazos County.
“It’s really rewarding to be able to help all of these people,” agrees Reyes’ classmate Patrick Mackey ’10. “I’ve learned how important refunds can be for these people,” said the accounting major, who reported that the largest refund he calculated for an individual was $6,000.
Beyond simply filing taxes, representatives from United Way also give low-income filers counsel on how to handle their refund checks, such as opening a checking and savings account if they don’t already have one. Since they are filing electronically and can have their refund directly deposited into a bank account rather than waiting for a refund check, it’s a good way to force filers to set up a bank account, says Lei Wang ’09. “It can be a big benefit for their life in the future to do it.”
In addition says Myers, electronic filing and direct deposit through VITA helps taxpayers receive their refunds quickly, thus avoiding the temptation to take a refund anticipation loan (RAL). With electronic filing and direct deposit through VITA, refunds are available within 10 days from the IRS. An RAL is a short-term loan available from commercial tax preparers for taxpayers who want to receive quick cash for their refunds. The high fees charged for these loans significantly reduce the amount of cash the taxpayer receives from a refund.
Wang says he can relate to the filers he’s seen who are intimidated by the tax system, as he is an international student and knows first-hand how complicated the process is. “In the beginning I was really nervous to help people,” said the native of China who has also lived in Japan for 11 years. Wang says that he studied very hard and triple checks his work to be sure that those he helps get the biggest return possible. “For people that don’t know all of the rules â€¦ when they are given instruction, it really makes them feel good. They are glad to get the help,” he said.
Need help filing your taxes in the Bryan/College Station area? Call the United Way office at 2-1-1 to set up an appointment with a volunteer.
- IRS: “It’s easier than ever to find out if you qualify for EITC”
- United Way of the Brazos Valley: “Financial Stability Partnership Tax Site Opening”